Ib Economics Commentary 1 Microeconomics EssayRebecca Bundhun, (October 19, 2012) Cost of summer getaways hit as air ticket prices rise, The National, http://www.thenational.ae/thenationalconversation/industry-insights/tourism/cost-of-summer-getaways-hit-as-air-ticket-prices-riseThe cost of an airline ticket can fluctuate tremendously based on a number of factors. The goal of airlines is to maximize their capacity by having the greatest number of passengers on all trips. This may however be difficult, as airlines pricing is not only dictated by their own operating costs and profit margins required but they have to consider complementary items that could have an effect on supply and demand for their product. By definition, demand theory explains the inverse relationship between quantity and price. This law explains that if the quantity available of a product or service wanted by the public is low, the price for that product or service will be high. As demand for a product or service increases, the price will increase.
