If increasing air fares increases revenues and decreasing them decreases revenues, then the demand for air travel has a price elasticity of:

CA Foundation · Business Economics · MTP · September 2024
If increasing air fares increases revenues and decreasing them decreases revenues, then the demand for air travel has a price elasticity of:
(A) A. 0
(B) B. > 0 but < 1
(C) C. 1
(D) D. > 1

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. > 0 but < 1

Topics: Theory of Demand and Supply

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