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 elasticityis 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:
Price Elasticity =
% Change in Quantity Demanded
% Change in Price
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 DemandPrice elasticityis 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:Price Elasticity =% Change in Quantity Demanded% Change in Price
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