Which of the following best explains why people booking airline tickets just prior to their departure dates tend to pay a higher price than those that book a long time in advance?
A) Individuals booking tickets just a few days in advance tend to have a lower opportunity cost of their time.
B) Individuals booking tickets just a few days in advance tend to have a more inelastic demand for airline tickets.
C) Individuals that book tickets a long time in advance tend to have a lower demand for airline tickets.
D) Individuals booking tickets just a few days in advance tend to be businessmen whose firms are paying for their tickets so they are not concerned about the price.

Question

Quizplus · Accepted Answer

Individuals booking airline tickets just prior to their departure dates have a more inelastic demand for tickets, meaning they are less sensitive to changes in price. They may be booking last-minute due to unexpected circumstances, such as a family emergency or a sudden change in travel plans, and therefore have less flexibility in their travel arrangements. Airlines can take advantage of this and charge higher prices for these last-minute tickets.

Which of the Following Best Explains Why People Booking Airline