An Econmics View Point on Airline Tickets.
The Supply and Demand for Air faire
The main goal of any product or service in the market is for it to be produced at a low cost and the ability to turnover the product at a high profit. In Our book, this theory is defined as, “Economics of a business” in depth it means the key factors that affect the ability of a firm to earn an acceptable rate of return on its investments. Which leads to the three basic economic questions one, which goods and services should be produced? Second, how should these goods or services be produced? And lastly one of the most important questions, for who shall these goods or services be produced? To get a better understanding of the Economics of business we will take a look at the Supply and demand for Airfare, this project will examine what factors drive the demand for travel and what demand functions affect the supply and demand, the economic costs and cost variables that it takes to run an Airline, The elasticity and inelasticity of demand, what drives supply, competition in the industry, and do a compare and contrast analysis of the industry. There are four classifications of markets in Econ, Perfect competition, pure monopoly, monopolistic competition and an oligophy. Market structure for airlines is an oligopoly. This means that there are only a handful of companies that compete in this industry. Oligopolies are more competitive than monopolies, industries for which there are only one seller of the product, but are less competitive than industries that experience near perfect competition. The fact that only a handful of companies can compete in this industry means that these companies can set price and consumers will have to settle for the best options that are afforded to them. Air Line Companies are very well versed in managing the economics of running a business. The need to travel and get from point A to point B is a necessity that will always have a high demand. Demand...
Please join StudyMode to read the full document