Essay About 2000-P And Ticket Price

Ba 523 – Demand & Supply Analysis
Assignment 1: Demand & Supply Analysis-Daniel Kiesling-BA 5231a)TR = P*QTR = P(2000-P)dTR/dQ = 2000-2PP=$1000        Q = 2000-1000Q = 1000                 To maximize total revenues, the ticket price must be set at $1000. At this price,         The demand will be 1000 passengers, thus only half of the ship will be filled.1b)MC = MR500 = 2000-2QQ=750P=2000-750P=$12501c)        TP = P*Q        TP = (750)*(1000)        TP=$75001d)  In the short team, we will be more in dept. We may be in trouble for the short term. However, we may be okay in the long run by making small profit margins and making up the difference in the fixed cost. I believe we should stay in business. 2a) The following demand function can be determined by the y intercept (Q=0) and amount of change in price per unit of demandP = 20 – 2QQ = 10 – .5P2b)The following supply function can be determined by the y intercept (Q=0) amount of change in supply per unit of demandP = 2 + QQ = P-22c)Qd = Qs10-.5P = P – 212 = 1.5PEquilibrium Price = $8        Q = P-2        Q = 63)RPM = Passengers*Miles = 240*4,000 = 960,000ASM = Airline Seats * Miles = 300*4,000 = 1,200,000Yield = Revenue/RPM = 200,000/960,000 = .208 = 20.8%Unit Cost = Cost/Seats Available = 160,000/300 =$533.33Unit Revenue = Revenue/ Seats Available = 200,000/300 =$666.67 Load Factor = RPM/ASM = 960,000/1,200,000 = .8Break Even Load Factor = CASM/Yield   =  (Cost/ASM)/Yield = (160,000/1,200,000)/.208 = .6414a) Qd = Qs 140 – P = -160 +4P300 = 5PInitial Equilibrium Price=$60Qs = -160+4PQs = -160+4(60)Initial Equilibrium Quantity = 804b) New Qs = -160 + 4(P+5)Qd = Qs 140 – P = -160 + 4(P+5)280 = 5PAfter Tax Equilibrium Price = $56Qd = 140 – PAfter Tax Quantity = 84