Term Paper for Economics

Published: 2021-06-29 06:56:04
essay essay

Category: Business

Type of paper: Essay

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The smallest difference in the price can make the biggest difference. Since everything is limited in this world, people must make choices between different items because the resources which are necessary to fulfill their wants are limited which in turn causes the prices of the goods and services to get high. The article, "High fuel cost weigh on fragile airlines" by Brent Jang, talks about how the prices of the crude oil and the refining oil are increasing which is affecting the profitability of the airline industry.
As we already know after reading the article that price of a product and quantity demanded are negatively related, increase in the price of the crude oil will automatically decrease the quantity demanded for the resource. If we take a look at the graphs posted at the bottom of this paragraph, we can predict that when the price of the crude oil increases, the demand of the oil will tend to decrease. This will leave an effect on the ticket price to increase. Therefore, when the prices of the tickets will increase, the consumer confidence to purchase the tickets will decrease, thus quantity demand decreases.

If consumers are willing to buy more tickets, Air Canada and West Jet must be able to supply the customers with the availability of the seats, thus the demand curve and the supply curve for the amount of seats will increase and the price will stay ambiguous. Due to consumer confidences, Air Canada and West Jet do not need to worry about the tickets sold. Even though the costs of the tickets have increased, people are still willing to purchase tickets.

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