ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Increase
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Decrease
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Stay the same
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None of the above
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Detailed explanation-1: -Income elasticity measures the sensitivity of demand • for a good to changes in individual or aggregate income levels. The elasticity of air travel demand varies according to the coverage and location of the market in which prices are changed and the importance of the air travel price within the overall cost of travel.
Detailed explanation-2: -Economic Impact Of Commercial Aviation Commercial aviation drives 5% of U.S. GDP-the equivalent of $1.25 trillion in 2022. Every day, U.S. airlines operate 25, 000 flights carrying 2.3 million passengers to/from nearly 80 countries and 66, 000 tons of cargo to/from more than 220 countries.
Detailed explanation-3: -Financial risks: There are three factors that cause financial problem for airline industry: fuel price, interest rate, currency rate. Fuel price: In general, fuel price always plays an important role in the world economy.
Detailed explanation-4: -Fuel. The cost of air freight forwarding service depends on the fuel price. Weight and Volume. Weight and volume are crucial factors when quoting a price. Economic Conditions. Government Regulations. Distance/ Destination. 16-Mar-2021