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One reason why airlines charge business travelers and leisure travelers different prices is

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One reason why airlines charge business travelers and leisure travelers different prices is

One reason why airlines charge business travelers and leisure travelers different prices is

• business travelers fly according to schedules that are planned months in advance. Many leisure travelers buy their tickets at the last minute.

• business travelers usually travel alone. Leisure travelers often fly with friends and family members; therefore, they have a more inelastic demand for airline tickets than business travelers.

• business travelers fly more often than most leisure travelers. As a result, their employers are able to bargain with airlines for lower fares than leisure travelers pay.

• business travelers often have inflexible schedules and have to travel on a particular day. The opposite is true for leisure travelers.

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Microeconomics

Edition: 7^th

Authors: Hubbard, O'Brien

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