Consider the following statement: ""an increase in the cost of oil will cause the price of a plane ticket to increase. This increase in price will cause a decrease in demand for airline travel and a leftward shift in the demand curve. "".

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01-02-2022
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Consider the following statement: ""an increase in the cost of oil will cause the price of a plane ticket to increase. This increase in price will cause a decrease in demand for airline travel and a leftward shift in the demand curve. "".

Sagot :

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AFOKE88idn AFOKE88idn · Answer 1 · 2022-02-04T05:33:45-05:00

The flaw in the given statement about price and demand for airplane tickets is that; An increase in the price of a ticket will not cause a decrease in demand, but rather a decrease in quantity demanded.

Price and Demand

This is about price and demand.

Now, in macroeconomics, we know that;

As the price of a product increases, there will be a corresponding increase in the quantity of that product supplied (but not a change in supply) and as well a reduction in the quantity of that product demanded (but not a change in demand). This will happen until the equilibrium price is achieved.

Now, in our question we see that they are insinuating that an increase in price would lead to a change in demand and that does not correspond to macroeconomics principle.

Thus, the flaw in the statement is that An increase in the price of a ticket will not cause a decrease in demand, but rather a decrease in quantity demanded.

Read more about Price and demand at; https://brainly.com/question/2398546

Sagot :

Price and Demand

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