In: Economics
Bring out the factor that may change the supply and demand conditions and thereby the equilibrium price for airlines tickets. Use graph for elaboration
The change in factors of Air tickets:
Increase in demand for air ticket due to increased income shifts the demand curve rightward from D to D1, which further leads the quantity purchased of air tickets from Q1 to Q2. In response, the airline companies will increase the price of ticket from P1 to P2.
Rise in price of airticket due to rise in price of fuel will shift the demand from D1 to D2, which will eventually leads to a fall in quantity of ticket purchased from Q1 to Q2 . This will further cause the airline comapnies to reduce the price of airticket from P1 to P2.