Question

Suppose that business travelers and vacationers have the following demand for airline tickets from New York to Boston:

Price	Quantity Demanded by Business Travelers	Quantity Demanded by Vacationers
(Dollars)	(Tickets)	(Tickets)
150	2,100	1,000
200	2,000	800
250	1,900	600
300	1,800	400

As the price of tickets rises from $250 to $300, the price elasticity of demand for business travelers is   , and the price elasticity of demand for vacationers is   , using the midpoint method. Therefore, the demand for airline tickets in this price range is   elastic for vacationers because business travelers are   sensitive to changes in price.

Answer 1

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