Question

In: Economics

If a passenger leaves for business travels by air, he or she will be reimbursed by...

If a passenger leaves for business travels by air, he or she will be reimbursed by the company, but the traveler will bear the travel expenses himself. Explain what this means about the price elasticity of demand for air travel.

Solutions

Expert Solution

If a passenger leaves for business travels by air, he or she will be reimbursed by the company, so the price elasticity of demand for such a passenger will be inelastic. Since the rise in price will have little or no impact on quantity demanded for air travel as it is going to be reimbursed by the company. Also the demand for air travel is a necessity good for business travels.

Travellers will bear the travel expenses himself so the price elasticity of demand is elastic. A rise in price will lead to greater fall in quantity demanded since the travellers pay himself, it will be relative elastic demand.

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

A fisherman leaves his home port and heads in the direction N 70° W. He travels...
A fisherman leaves his home port and heads in the direction N 70° W. He travels d1 = 20 mi and reaches Egg Island. The next day he sails N 10° E for d2 = 65 mi, reaching Forrest Island. (a) Find the distance between the fisherman's home port and Forrest Island. (Round your answer to two decimal places.) mi (b) Find the bearing from Forrest Island back to his home port. (Round your answer to one decimal place.) S...
A boat leaves the harbor entrance and travels 27 miles in the direction ??? ° ?....
A boat leaves the harbor entrance and travels 27 miles in the direction ??? ° ?. The captain then travels for another 16 miles in the direction ??? ° ?, which is the boat’s final position. How far is the harbor entrance from the boat’s final position? What is the bearing of the boat from the harbor entrance? Round your answers to the nearest WHOLE numbers.
She has just hired an additional employee. He lives in a different city and travels 90...
She has just hired an additional employee. He lives in a different city and travels 90 miles a day on public transportation. Recompute the mean and median. Describe the effect of this outlier
A boat leaves a dock at 2:00 PM and travels due south at a speed of...
A boat leaves a dock at 2:00 PM and travels due south at a speed of 15 km/hr. Another boat has been heading due east at 20 km/hr and reaches the same dock at 3:00 PM. How many minutes after 2:00 PM were the two boats closest together?
A boat leaves a dock at 1pm and travels due South at a speed of 20km/h....
A boat leaves a dock at 1pm and travels due South at a speed of 20km/h. Another boat has been heading due East at 10km/h since 1pm and reaches the same dock at 3:30pm. At what time were the two boats closest together?
A fishing boat leaves a dock at 2:00pm and travels due east at a speed of...
A fishing boat leaves a dock at 2:00pm and travels due east at a speed of 20km/h. Another boat has been heading due north at 15 km/h and reaches the same dock at 3:00pm. At what time were the two boats closest together?
--Suppose a ray of light travels from air into water.   a. If the air has an...
--Suppose a ray of light travels from air into water.   a. If the air has an index of refraction of n = 1.0, and the light enters the water with an angle of 55 degrees to the normal, and the refracted angle is 38 degrees from the normal, what is the index of refraction of the water? b. Can total internal reflection occur when the light ray passes from the air to the water? Why or why not? --Which of...
A boat leaves its home port in search of fish and travels 35 km at 30o...
A boat leaves its home port in search of fish and travels 35 km at 30o S of E, then 10 km due S, then 50 km due E and finally 12 km at 20o N of E. Having failed to find any fish, the crew throws the captain overboard and decides to turn home. a. (/4) If the boat is to sail straight home to port, what direction should it sail and how far will it have to travel?...
Air traffic controllers perform the vital function of regulating the traffic of passenger planes. Frequently, air...
Air traffic controllers perform the vital function of regulating the traffic of passenger planes. Frequently, air traffic controllers work long hours with little sleep. Researchers wanted to test their ability to make basic decisions as they become increasingly sleep deprived. To test their abilities, a sample of 6 air traffic controllers is selected and given a decision-making skills test following 12-hour, 24-hour, and 48-hour sleep deprivation. Higher scores indicate better decision-making skills. The table lists the hypothetical results of this...
Air traffic controllers perform the vital function of regulating the traffic of passenger planes. Frequently, air...
Air traffic controllers perform the vital function of regulating the traffic of passenger planes. Frequently, air traffic controllers work long hours with little sleep. Researchers wanted to test thier ability to make basic decisions as they become increasingly sleep deprived. To test their abilities,a sample of 6 air traffic controllers is selected and given a decision-making skills test following 12 hour, 24 hour, and 48 hour sleep deprivation, Higher scores indicate better decision-making skills. The table list the hypothetical results...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT