Bubba's Hula Shack Bar and Bistro has begun giving customers who can show proof that they arrived at the establishment by public transportation a 10 percent discount on their total bill.All else equal, customers who arrive by public transportation to take advantage of Bubba's Hula Shack discount have a ________ for the services of the establishment than customers who drive to the establishment.
A)higher price elasticity of demand
B)lower price elasticity of demand
C)higher price elasticity of supply
D)lower price elasticity of supply

Question

Quizplus · Accepted Answer

Customers who arrive by public transportation may have a higher price elasticity of demand because they may be more price-sensitive and are actively seeking discounts to save money on their transportation costs. Therefore, the discount may incentivize them to visit the establishment more frequently than customers who drive and may be less price-sensitive.

Bubba's Hula Shack Bar and Bistro Has Begun Giving Customers