"Delta Air Lines Inc., the nation's No. 2 airline by traffic, says that for every $1 increase in the passenger facility charge, passenger demand declines by more than 1%." What additional information is needed to calculate price elasticity of demand for air travel?

2. Why do airports support bumping federal taxes and fees on airline tickets, while airlines oppose increases?

3. Should Congress approve increases in taxes and fees on air travel? What would be the effect on the demand for air travel? What would be the effect on airline profits?

Answer rating: 100% (QA)

1 Since it mentions 1 dollar change in charge we need initial le... View the full answer