a) Business travelers tend to pay higher fares or prices because for them travelling is the main motive and they do not care about the price. They want comfort and quick services and are thus ready to pay higher fares for the same. Leisure travelers on the other hand look for lower fares to fit in their budget. They do not look for comfort or services, and are only concerned with minimizing their costs.
b) Business travelers have a lower elasticity of demand for air travel as their demand for air travel does not get affected by the prices. For them the work for which they are travelling is more important. In case of leisure travelers, the price elasticity of demand is higher as for them minimizing the cost is more important. They are ready to postpone their holiday trip if they foresee a drop in airfares in the future.
So, the lower elastic market ends up paying higher prices than those with elastic demands.
c) In case of restrictions, the following effects can be seen:
1) If a person is booking tickets well in advance, it means that the customer falls under the category of leisure customer as such travelers plan their trip well in advance. So when they get discounts on fares, they will be more than happy to buy them.
2) Saturday is quite a busy day for travelers because people are in hurry to finish off their work and get to their offices by Monday. With this, the travel companies tend to separate business and leisure travelers by giving more priority to business travelers, so that they are able to get tickets easily.
3) This type of time restriction, which disallows discounts for travelling during peak time of the day help to sort business travelers from leisure travelers. Since business travelers usually travel during peak times of the day, they would end up not being able to avail the discounts and thus paying higher prices.
d) In all these cases, it is the business travelers who end up paying more because of their price inelastic demand for air travel. Companies try to maximize their producer surplus by making complete use of their price inelastic demand.
Airline industry implemented the policy to have photo identification machines to check baggage before boarding a flight is a good step towards safe travelling without any extra costs. This will not only help avoid terror threats but will also help in stopping people from carrying unnecessary things that might prove to be harmful inner side the flight.
Moreover, terrorist attacks can happen anywhere and anytime. Thus, it is always better to take necessary steps to avoid such mishaps.
According to their say, it is better to be safe than sorry!
The reason stated by the owner of dating services with respect to difference in the fees for men and women was to compensate for inequalities in pay scales for men and women. However, another reason that can hold true in this regard can be that women are more interested than men to avail these services. Charging lower prices from women in that case will increase more and hence their earning will also increase more as compared to when men avail dating services.