Flighty Forsure, world traveler, says if the airlines want to attract more passengers, they should lower fares for business travelers as well as for vacationers. What is the economist’s view of this policy position?

A. A Great Idea!
B. Wrong! Vacationer’s demand for plane tickets is inelastic so the price should be decreased.
C. Wrong! Business traveler’s demand for plane tickets is inelastic so the price should be increased.
D. When price is dropped for an inelastic product, TR rise.

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Social Studies

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Flighty Forsure, world traveler, says if the airlines want to attract more passengers, they should lower fares for business travelers as well as for vacationers. What is the economist’s view of this policy position?

A. A Great Idea!
B. Wrong! Vacationer’s demand for plane tickets is inelastic so the price should be decreased.
C. Wrong! Business traveler’s demand for plane tickets is inelastic so the price should be increased.
D. When price is dropped for an inelastic product, TR rise.

Answer :

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Bribri74801go Bribri74801go · Answer 1

Bribri74801go Bribri74801go

The answer is is be wrong vacationers

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AbsorbingMango AbsorbingMango · Answer 2

The economist’s view about the policy is : Wrong! Business traveler’s demand for plane tickets is inelastic so the price should be increased.

Inelaticity in demand

In the world of economics, the demand of a service or goods does not change even if price of that service or goods changes.

When the price increases, the buying habits of the consumer remains same, and also the buying habit or demand do not change when the price falls.

Thus in the context, lowering the fares of business travelers and vacationers will not change buying habits of the plane tickets of the people.

People will travel and will buy plane tickets even if the prices are not lowered.

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