Airline Ticket Prices Is The Foundation Of All Economic...

Airline Ticket Prices Is The Foundation Of All Economic...

Supply and demand, together, are the foundation of all economic ventures. Airline ticket prices are determined by the demand for travelers and the marginal cost of filling the seats; thus generating supply. The interception of supply and demand is where business is generated. This interception of the airlines pricing curves is indicated at their equilibrium point – where there's neither a surplus nor a shortage. Why can an airline ticket from Casper, Wyoming to Denver, Colorado, and from Denver, Colorado to Orlando, Florida cost the same? Does this make economic sense? Where and when tickets are purchased affects the bottom–line price the consumer pays. Price and value are extremely important in economics–thus; the effect of supply and demand, affects the overall cost of the ticket.



Goals of Pricing

Airline ticket prices can vary from day to day, from airline to airline; with the most important variable being competition. Industry pricing for a market of such a magnitude is a micro–, and macro–economic decision. Its affects will in–turn effect the entire economy of the industry. We all know that when shopping for the cheapest price for an airline ticket, depending on various factors, Seaney (2011) you will pay hundreds of dollars more, or less, than the passenger seated right next to you. That being, the airlines primary goal is to maximize profit(s) on every seat, –on every plane, –on every route. This is the result of supply, demand, and price curve working cohesively

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