If increasing airfare increases revenue and decreasing revenue decreases then the demand for air travel has a price elasticity of:

CA Foundation · Business Economics · MTP · September 2026
If increasing airfare increases revenue and decreasing revenue decreases then the demand for air travel has a price elasticity of:
(A) A. Zero
(B) B. Greater than zero but less than one
(C) C. One
(D) D. Greater than one

Suggested Answer and Working Notes:

Correct Answer: Option (D)

D. Greater than one

Topics: Theory of Demand and Supply

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