Rising jet fuel prices recently led most major US airlines to raise fares by approximately 15%. Explain how this substantial increase in airfares would affect the following: The demand for air travel. The demand for hotels. The demand for rental cars. The supply of overnight mail.
Rising jet fuel
- The
demand for air travel. - The demand for hotels.
- The demand for rental cars.
- The supply of overnight mail.
"A point at which demand and supply curves of a product intersect each other is known as equilibrium point which gives information related to equilibrium price and equilibrium quantity of a product. Equilibrium price/quantity can increase or decrease with respect to shifts in demand and/or supply curve. Demand curve usually shifts with factors such as number of buyers, price of related goods, income, tastes, future prices, etc. Supply curve usually shifts with factors such as number of sellers, costs of production, advancement of technology, future prices, etc."
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