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Suppose an Airline Determines That Its Customers Traveling for Business

Question 195

Multiple Choice

Suppose an airline determines that its customers traveling for business have inelastic demand and its customers traveling for vacations have an elastic demand.If the airline's objective is to increase total revenue,it should


A) increase the price charged to vacationers and decrease the price charged to business travelers.
B) decrease the price charged to vacationers and increase the price charged to business travelers.
C) decrease the price to both groups of customers.
D) increase the price for both groups of customers.

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