Erin and Deidre, two residents in Ithaca, New York, are planning a trip to Boston.Erin, the sales manager for a large retailer, has to attend a business meeting.Deidre, a college student on vacation, is planning a leisurely trip to visit friends and relatives.Whose demand curve for air travel is likely to be more elastic?
A)Erin
B)Deidre
C)There is no difference in their price elasticities of demand.
D)The elasticity of the demand curves for Erin and Deidre cannot be determined without more information.

Question

Quizplus · Accepted Answer

Deidre's demand curve for air travel is likely to be more elastic. This is because as a college student on vacation, she is likely more price-sensitive and has more flexible travel plans compared to Erin, who has to attend a business meeting and may be less price-sensitive. Deidre may be able to adjust her travel plans or choose a different mode of transportation if the prices for air travel increase, while Erin may be willing to pay a higher price due to the necessity of attending the business meeting.

Erin and Deidre, Two Residents in Ithaca, New York, Are