Question

Batik Airlines is an airline flying the Langkawi route that has seasonal demand. The firm's total demand is given by the equation: "2 = 600 - 4P." Here,

Q represents the number of passengers per year, in thousands. Can you determine the equilibrium price and quantity for this seasonal demand?

Answer 1

The equilibrium price for seasonal demand is 148 and the equilibrium quantity is 8 thousand passengers per year.

Step-by-step explanation:

To determine the equilibrium price and quantity for seasonal demand, we can solve the given equation: 2 = 600 - 4P, where Q represents the number of passengers per year. To find the equilibrium, we set the quantity demanded equal to the quantity supplied. In this case, the equation becomes: 2 = 600 - 4P. Rearranging the equation, we get P = (600 - 2) / 4 = 148.

So, the equilibrium price is 148. To find the equilibrium quantity, we substitute this price back into the demand equation: Q = 600 - 4*148 = 600 - 592 = 8.

Therefore, the equilibrium price for seasonal demand is 148 and the equilibrium quantity is 8 thousand passengers per year.