When an airline company raises the price of tickets for a certain flight by 10%, it...
When an airline company raises the price of tickets for a certain flight by 10%, it experiences an 8% decline in the number of passengers on that flight. The price elasticity of demand for the tickets on this particular flight is:
Homework Answers
Answer
The price elasticity of demand=%change in the quantity/%change in
the price
The price elasticity of demand for the tickets on this particular
flight is:
=-8/10
=-0.8
The price elasticity of demand for the tickets on this particular
flight is:
-0.8, and demand is relatively inelastic.
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