Via Rail Canada charges lower fares to students than to its other passengers.This pricing strategy increases Via Rail Canada's profits.From this information,we can conclude that students must have a _____ demand for Via Rail Canada train service than do other passengers.
A) more price-elastic
B) lower
C) greater
D) less price-elastic

Question

Quizplus · Accepted Answer

If Via Rail Canada can charge lower fares to students and still make a profit, it suggests that students are more sensitive to price changes, i.e., more price-elastic, than other passengers. This means that a small change in price will have a greater impact on the demand for Via Rail Canada train service among students than it would for other passengers. Hence, by lowering fares, the company is able to attract a greater number of students, which ultimately leads to an increase in profits.

Via Rail Canada Charges Lower Fares to Students Than to Its