What effect, if any, does each of the following events have on the price elastic

Question

What effect, if any, does each of the following events have on the price elasticity of demand for corporate-owned
jets?

a. Reduced corporate earnings lead to cuts in travel budgets and increase the share of expenditures on corporate jettravel.

b. Further deregulation of the commercial airlines industry substantially increases the variety of departure times and destinations offered by commercial airlines.

c. The cost of manufacturing corporate jets rises.

d. A new, much more fuel-efficient corporate jet is introduced.

Explanation / Answer

A) reduced corporate earnings will lead to cut in budget, The first thing to cut would be jet travel. It has negative effect

B) Negative effect. The demand will go down if availability increases very much

C) Will cause the demand to go down

D) Demand will increase.

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