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Teaching Resources
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EconActive Solutions (CNN News Questions)
Chapter 5: Business AirFare: el1m02v1
- According to the video, how is the demand for business airfares changing?
- What are the most important factors influencing the change in the elasticity of demand for business air travel?
- Given the same supply curve, compare the effects of an increase in demand for business airfares with an elastic vs. an inelastic demand curve.
Answers:
- Demand for business airfare is becoming more elastic.
- Time to adjust to higher prices and the recent availability of substitutes, such as video conferences, would make demand more elastic.
- If demand is elastic, an increase in demand raises prices by a smaller amount than when demand is inelastic.
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