The demand curve for round trip air transportation between cities is given by Q=

Question

The demand curve for round trip air transportation between cities is given by Q= 5,000P^-0.8 X^0.2 y^0.5 z^.2 where P is price, x is flying time, y is air distance, and z is total population in the two cities. Given that for two cities, x= 3 hours, y= 1600 miles, and z= 5,000,000, the demand curve is given by Q= 5,445, 630 P^-0.8 A. what will be the number of roundtrip tickets demanded between these cities if the price is P= 600? B. What will happen to the quantity demanded if: (i.) the price increases by 1%? (ii.) the population in these cities increase by 1 %?

Explanation / Answer

the number of round trip tickets demanded will be obtained by substituting the value of the prince in the demand equation which is 32623. 1)if the price is increased by 1% then the new price will be 606 now substituting this value in demand equation we get quantity demanded =32364. 2)if the population is increased by 1% then the new population will be 5005000 substituting this value in the demand curve we get 32644

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