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The eastern shuttle, INC is a regional airline providing shuttle service between New York and Washington DC. An analysis of the monthly demand for service has revealed the following demand relation:

Q= 26,000 - 500p - 250pOG + 200IB – 5,000S

Where Q is quantity measured by the number of passengers per month, P is price ($), POG is a regional price index for other consumer goods (1967=1.00), IB is an index of business activity, and S, a binary or dummy variable, equals 1 in summer months and 0 otherwise.

Determine the demand curve facing the airline during the winter month of January if POG=4 and IB=250

Determine the demand curve facing the airline, quantity demanded, and total revenues during the summer month of July if P=$100 and all other priced related and business activity variables are as specified previously

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91264315

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