Question: I need help with figuring out this problem: Suppose that business travelers and vacationers have the following demand for airline tickets from New York to

I need help with figuring out this problem:

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

(Parenthesis below are the options I have for the correct answer to this problem)

As the price of tickets rises from $200 to $250, the price elasticity of demand for business travelers is (0.78, 4.35, 0.23, or 1.29), and the price elasticity of demand for vacationers is (0.23, 1.29, 4.35, or 1), using the midpoint method. Therefore, the demand for airline tickets in this price range is (less or more) elastic for vacationers because business travelers are (more or less) sensitive to changes in price.

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