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Airlines that try to lower fares in order to increase revenue believe the demand for airline service is in price elasticity.
What is price elasticity?
Price elasticity occur when a change in price of a commodity or services leads to a change in the quantity of goods or services demanded.
It is believed that when the price is lower more people will demand for the product.
Therefore, Airlines that try to lower fares in order to increase revenue believe the demand for airline service is in price elasticity.
Learn more on price elasticity here,
https://brainly.com/question/5078326
Airlines that try to lower fares to increase the revenue believe that the demand for the airline's service is price elastic.
What do you mean by demand?
Demand refers to the quantity of a good that consumers can be able and willing to purchase at prices for a particular period.
Airlines try to lower the fares to increase revenues believing the demand to be price elastic for the airline's service. A change in prices causes a substantial change in the demand or supply is price elastic.
Learn more about demand here:
https://brainly.com/question/14456267
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