To explain:
The way airfare tumble can change the
Explanation of Solution
Airfares tumble, while there is no change in fares of long-distance buses fares will increase the demand for airline travel over bus travel because the airfares are lower compared to its substitute mode of travel which are buses.
Demand and supply:
Demand refers to the willingness and ability for a consumer to purchase the commodities or services at a given price within a given period of time, whilst supply is the willingness and ability of a producer to sell the commodities or services at a particular price within a particular period of time.
To explain:
The way increase in price of jet fuel can change the demand and supply for travelling by air.
Explanation of Solution
The increase in price of jet fuel would increase the cost of production affecting the supply of airlines. This supply for air travel will fall.
Demand and supply:
Demand refers to the willingness and ability for a consumer to purchase the commodities or services at a given price within a given period of time, whilst supply is the willingness and ability of a producer to sell the commodities or services at a particular price within a particular period of time.
To explain:
The way reduction in number of daily fights by airline can change the demand and supply for travelling by air.
Explanation of Solution
Airlines reducing the number of flights each day signifies a fall in supply for air travel against the high demand.
Demand and supply:
Demand refers to the willingness and ability for a consumer to purchase the commodities or services at a given price within a given period of time, whilst supply is the willingness and ability of a producer to sell the commodities or services at a particular price within a particular period of time.
To explain:
The way expectations of people for an increase in airfare next summer can change the demand and supply for travelling by air.
Explanation of Solution
If people expect airfare to increase next summer then they will use air travel more now before the process drives up, which will thereby increase demand.
Demand and supply:
Demand refers to the willingness and ability for a consumer to purchase the commodities or services at a given price within a given period of time, whilst supply is the willingness and ability of a producer to sell the commodities or services at a particular price within a particular period of time.
To explain:
The way if fall in price of train can change the demand and supply for travelling by air.
Explanation of Solution
Trains are a substitute to airlines, therefore when the price of train travel falls it will reduce the demand for air travel because people will prefer to travel through trains rather than airlines.
Demand and supply:
Demand refers to the willingness and ability for a consumer to purchase the commodities or services at a given price within a given period of time, whilst supply is the willingness and ability of a producer to sell the commodities or services at a particular price within a particular period of time.
To explain:
The way increase in price of a pound of air cargo can change the demand and supply for travelling by air.
Explanation of Solution
The increase in price of a pound of air cargo will decrease the demand because people will have to pay more to bring more luggage, therefore reducing the demand.
Demand and supply:
Demand refers to the willingness and ability for a consumer to purchase the commodities or services at a given price within a given period of time, whilst supply is the willingness and ability of a producer to sell the commodities or services at a particular price within a particular period of time.
Want to see more full solutions like this?
- Draw a supply and demand graph for new cars. Show the impact that the 2008-09 recession (with the decrease in consumer income) had on the market for cars. You can show this best by shifting one of the curves. What happens to the price and quantity of new cars?arrow_forwardUsing a graph, explain how an increase in technology will effect the equilibrium price and quantity of DVD players. Again using a graph, explain what happens in the market for video cassette recorders. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardThe figure shows a market for oil. Price ($/barrel) 72 64 56 48 40 D 80 84 88 92 Quantity (million barrels) If the current price of oil is $44 per barrel, the quantity of oil demanded is A million barrels, the quantity supplied is A million barrels, and the quantity bought is AA million barrels. There is excess (demand/supply) A in the market, and the price is expected to (rise/fall)arrow_forward
- Question: Consider a market for Ice Cream an inferior good in Pakistan. For each of the given events, identify which of the determinants of the demand or supply are affected. Also indicate whether demand or supply increase or decreases. Then draw a diagram to show the effect on the price and quantity of Ice Cream. 1) News reports claim that the consumption of Ice Cream is good for the health of coronavirus patients. 2) There has been a decline in wages of all employees in Pakistan due to the third wave of coronavirus. 3) People in Pakistan decide to have more children. 4) Students of NED University develop new automated machinery for the production of Ice Cream. 5. There has been a decrease in people’s income due to COVID-19 crisis. (1. identify which of the determinants of the demand or supply are affected. Also indicate whether demand or supply increase or decreases of each. 2. Then draw a diagram to show the effect on the price and quantity of Ice Cream of each.)arrow_forwardEnumerate Similarities of the concept of demand and concept of supply.arrow_forwardFor each question start with a supply and demand graph of the market for tennis rackets. What happens to supply or demand in each scenario? Explain why and show on graph labeling the new equilibrium point.arrow_forward
- In a village, Lou and Lisa are the only people who buy haircuts. When the price is $15.00, Lisa plans to buy two haircuts a year and at $10.00 a haircut she plans to buy three. When the price is $15.00 a haircut, Lou plans to buy one haircut a year and at $10.00 a haircut he plans to buy two. What is one point on the market demand curve for haircuts? The quantity demanded is ________. A. 8 haircuts per year at $10.00 a haircut B. 4 haircuts per year at $12.50 a haircut C. 7 haircuts per year at $10.00 a haircut D.. 3 haircuts per year at $15.00 a haircutarrow_forwarddraw a new curve (demand or supply)arrow_forwardIdentify two causes, apart from an increase in income, of an increase in demand for a product.arrow_forward
- _______ Refers To an upper limit on the amount of a commodity that can be purchased by an individual unit?arrow_forwardHow a change in the market (including information, preferences, technology, price of alternative goods, regulations, taxes, etc.) has shifted either the supply or demand of a good. How did this change affect the market equilibrium for that good or service?arrow_forwardHow would you characterize the demand for the following products and why?• Steak• Milk• Life Saving Drug or Illegal, Addictive Drugs• Durable Goodsarrow_forward
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning