Give three examples of how businesses or nonprofit institutions use elasticity of demand to charge consumers different prices
Please provide the best answer for the statement.
In the airline industry, business travelers have a relatively more inelastic demand than leisure travelers. So, airlines can charge higher prices to the business travelers because their ticket purchases are not as sensitive to price changes as are leisure travelers. Also, children are often charged a lower price for a good or service because they have a more elastic demand than do adults. Universities charge a different net tuition price based on the income level of the student. Lower income students pay less tuition, and this serves to increase the number of low-income students attending college.
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The age-earning cycle shows an individual typically earning
A) a constant income (adjusted for inflation) over the entire working life of the worker. B) an income that cycles upward and downward as an individual ages. C) an income that increases with age, peaks, and then falls as retirement approaches. D) an income that declines until age 30-35 and then increases rapidly.
In order to protect against foreign exchange risk, firms can use
A) the spot market for foreign exchange. B) interest rate arbitrage. C) the forward market for foreign exchange. D) the J-curve.