Demand elasticities measure the change in the quantity
demanded of a particular good or service as a result of
changes to other economic variables, such as its own
price, the price of competing or complementary goods and
services, income levels, taxes, etc. This report estimates
the demand elasticity of air travel under various scenarios
and locations. It highlights three main types of demand
elasticity: own price elasticity, cross price elasticity and
income elasticity.
i) Price Elasticity of Demand
Price elasticity is a measure used to capture the sensitivity
of consumer demand for a good or service in response to
changes in the price of that particular good or service.
The price elasticity is defined as
Demand elasticities measure the change in the quantitydemanded of a particular good or service as a result ofchanges to other economic variables, such as its ownprice, the price of competing or complementary goods andservices, income levels, taxes, etc. This report estimatesthe demand elasticity of air travel under various scenariosand locations. It highlights three main types of demandelasticity: own price elasticity, cross price elasticity andincome elasticity.i) Price Elasticity of DemandPrice elasticity is a measure used to capture the sensitivityof consumer demand for a good or service in response tochanges in the price of that particular good or service.The price elasticity is defined as
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