Consider the following demand function for airline tickets (quantities are in thousands): Q 10-0.1px + 0.4p, +0.25p, +0.005Y, where P,price of an airline ticket Q=quantity demanded Py price of a bus ticket P, price of gasoline Y consumer income According to the above equation, airline tickets and bus tickets are goods. t, in equilibrium, the cross-price elasticity between airline tickets and gasoline is 1.8; when the price of the gasoline increases by 0%, the quantity demanded of airline tickets increases by (enter your response rounded to two decimal places)

Consider the following demand function for airline tickets (quantities are in thousands): Q 10-0.1px + 0.4p, +0.25p, +0.005Y, where P,price of an airline ticket Q=quantity demanded Py price of a bus ticket P, price of gasoline Y consumer income According to the above equation, airline tickets and bus tickets are goods. t, in equilibrium, the cross-price elasticity between airline tickets and gasoline is 1.8; when the price of the gasoline increases by 0%, the quantity demanded of airline tickets increases by (enter your response rounded to two decimal places)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Consider the following demand function for airline tickets (quantities are in thousands)
Q 10-0.1px + 0.4py +0.25p, +0.005Y, where
P, price of an airline ticket
Q=quantity demanded
Py price of a bus ticket
P, price of gasoline
Y consumer income
According to the above equation, airline tickets and bus tickets are
t, in equilibrium, the cross-price elasticity between airline tickets and gasoline is 1.8; when the price of the gasoline increases by 6%, the quantity demanded of airline tickets increases by
(enter your response rounded to two decimal places)
goods.

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