Determine the demand curve facing the airline during winter

Reference no: EM13235707

The Eastern Shuttle Inc., is a regional airline providing shuttle service between New York and Washington, DC. An analysis of the monthly demand for service has revealed the following demand relation:
Q = 26,000 - 500P - 250P og + 200 I b - 5,000S

Where Q is quantity measured by the number of passengers per month, P is price ($), P og is a regional price index for other consumer goods (1967 = 1.00, I b is an index of business activity, and S is a binary or dummy variable, equals 1 in summer months and 0 otherwise.

Determine the demand curve facing the airline during the winter month of January is P og = 4 and I b = 250.

Reference no: EM13235707

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