What is the price elasticity of their airline tickets

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Suppose that the demand function for regional airline Eastern Shuttle, Inc., is Q = 52,000 - 100P + 500PR + 0.45I where PR is the average price of rail service in their service area and I is the average income in the metro area. If P = $400, PR = $20, and I = $40,000, answer the following: (a) What is the price elasticity of their airline tickets? Is demand elastic or inelastic at this price? (b) What is the cross-price elasticity with respect to rail service prices? Is rail service a complement or substitute good? (c) What is the income elasticity? Are airline tickets a normal or inferior good? Cyclical or Noncyclical?

Reference no: EM13999678

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