2) Suppose that business travelers and leisure travelers have the demand schedules for airline tickets from Atlanta to Philadelphia given in the table above.
a) Draw both demand curves.
b) As the price of tickets rises from $200 to $300, what is the price elasticity of business travelers’ demand? What is the price elasticity of leisure travelers’ demand? (Use the midpoint method in your calculations.)
c) At what price is the price elasticity of demand equal to 1 for business travelers? For leisure travelers? Explain.
