If the price elasticity of demand for airline tickets is 1.2 for a leisure traveler and 0.9 for a business traveler, then a price-discriminating monopolist would charge
A. a higher price for the business traveler than the leisure traveler.
B. a lower price for the business traveler than the leisure traveler.
C. the same price for both travelers.
D. a less profitable price for the business traveler than the leisure traveler.
Answer: A
You might also like to view...
The economy is considered to be at full employment when
a. the actual rate of unemployment is less than the natural rate b. the leading economic indicators are unchanged for two consecutive quarters c. structural unemployment is zero d. frictional plus structural unemployment is less than the natural rate e. the rate of cyclical unemployment is zero
Which of the following is not included in a nation's balance of payments?
a. International interest and dividend earnings. b. Total holdings of the central bank's international reserves. c. Financial service sales by domestic banks to foreign customers. d. All of the above are included in the balance of payments.
One major reason for the law of demand is that
A) one price changing requires at least one other price to change in the opposite direction. B) people substitute relatively lower-priced goods for relatively higher-priced goods. C) a higher price never reduces quantity demanded by enough to lower total revenue. D) people are willing to produce more units at a higher price.
The thrust of government fiscal policy is expansionary when:
(a) Expenditure and taxation are increased. (b) Government expenditure is reduced and taxation is increased. (c) Expenditure and taxation are decreased. (d) Government expenditure is increased and taxation is reduced.