| Suppose Air France is currently charging $600 per ticket, airfare from JFK to LHR is $500 round-trip (its initial value), and the average hotel room rate in Paris is $150 per night (its initial value). If average incomes were to increase by approximately 10%, from $50,000 to $55,000 per year, the quantity of tickets demanded would increase from 1,500 to 1,521 per night, an increase of approximately 1.4%; therefore, the income elasticity of demand is about 0.14. From the fact that the income elasticity of demand is _____, we may conclude that tickets on Air France are ______. |