Photo AI
Using the data from Extract B, draw a supply and demand diagram for airline tickets to show the likely effects of the change in jet fuel prices between 2014 and 2015. - Edexcel - A-Level Business - Question 1 - 2017 - Paper 1
Question 1
Using the data from Extract B, draw a supply and demand diagram for airline tickets to show the likely effects of the change in jet fuel prices between 2014 and 2015... show full transcript
Worked Solution & Example Answer:Using the data from Extract B, draw a supply and demand diagram for airline tickets to show the likely effects of the change in jet fuel prices between 2014 and 2015. - Edexcel - A-Level Business - Question 1 - 2017 - Paper 1
Step 1
Draw the Supply and Demand Diagram
Answer
Begin by constructing a Cartesian plane with 'Price' on the vertical axis and 'Quantity' on the horizontal axis. Label the axes clearly.
Next, draw the initial demand curve (D) and the initial supply curve (S). The demand curve should be downward sloping, while the supply curve should be upward sloping, indicating standard market behavior.
Step 2
Step 3
Identify New Equilibrium and Consequences
Answer
Mark the original equilibrium point where the initial supply (S) meets demand (D). Then indicate the new equilibrium point where the new supply curve (S1) intersects the demand curve (D).
This creates a lower price level and a higher quantity of airline tickets sold, illustrating the impact of decreased jet fuel prices on the market for airline tickets.