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Represents the demand and supply schedules

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The table below represents the demand and supply schedules for Cheap1 Airlines, a low cost domestic airline. Table 3.1: Daily demand and supply schedule of Cheap1 Airlines for the Durban to Johannesburg route.

Price of air tickets (Rands)

Quantity demanded (tickets/day)

Quantity supplied (tickets/day)

500
300
50
600
250
100
700
200
150
800
150
200
900
100
250
1000
50
300
1100
0
300

Plot the supply and demand curves on the same set of axes. Explain what is unusual about the supply curve and why might this be true.

What is the equilibrium price and quantity of the air tickets?

Suppose there is a decrease in the number of tourists going from Johannesburg to Durban. The relevant curve changes by 25 units at each prevailing price.

-Plot the effect of this decrease on your existing diagram in 3.1, clearly showing the new equilibrium price and quantity of air tickets.

Reference no: EM132526602

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