You own a franchise of rental car agencies in Florida. You recently read a report indicating that about 80 percent of all tourists visit Florida during the winter months in any given year, and that 60 percent of all tourists traveling to Florida by air rent automobiles. Travelers not planning ahead often have great difficulty finding rental cars due to high demand. However, during non-winter months tourism drops dramatically, and travelers have no problem securing rental car reservations. Peak-load pricing is a kind of price discrimination to make additional profits by capturing consumer surplus.
Which months between the peak months and the off-peak months do you think the price elasticity of demand is more elastic? Why?