Introduction
Impact on the aviation industry in terms of input on market equilibrium – how price and output will change – affected by changes in demand and supply due to the above events
Main Body
1. Explain how the above events affect the demand and supply in the aviation industry – contributing to a change in the price and output
2. Explain how the above effects affect the related market
a. Complementary product – hotel accommodation
- Economic Causation
- Diagram
- Description of Diagram
b. Substitutes – train and other modes of transport
- Economic Causation
- Diagram
- Description of Diagram
c. Derived demand – plane manufacturers
- Economic Causation
- Diagram
- Description of Diagram
Conclusion
In sum, the above impact will affect various markets as seen from how they affect the market equilibrium of the respective markets. It is critical to understand the changes in the demand and supply factors and the types of demand and supply so as to derive the interrelationship of the different markets which will affect the market equilibrium.
