Kristy, Managerial Economics

Rail Tours sells packaged tours on rail lines, including gourmet meals and a reserved bed. The most popular tours are in the autumn when colors are at their peak. The overnight package for Saturday and Sunday morning are especially heavily booked. A market survey firm has just completed a study in which they conclude that if the package cost is $200 per couple, then Rail Tours can expect to sell 400 spaces on a typical Saturday. If the prices is raised to $225, unit sales drop to 380. The survey firm also reports that if per-capita income changes, Rail Tours can expect a large change in bookings. In particular, if per-capita income falls by 1%, then bookings will probably fall by 2%.
a. If the demand curve is extrapolated from the data points given, what is the equation for demand? Are there any precautions in extending the curve in this matter?
b. Are tours normal or inferior goods? Why?
c. If you were responsible for making a forecast for bookings, would you accept this forecast as is? Would you wand additional information about demand? If so, what sort? Explain.
Posted Date: 11/12/2012 5:57:36 PM | Location : United States

Related Discussions:- Kristy, Assignment Help, Ask Question on Kristy, Get Answer, Expert's Help, Kristy Discussions

Write discussion on Kristy
Your posts are moderated
Related Questions
Plot the demand schedule and draw the demand curve for the data given for Marijuana in the caseabove.

DIFFERENTIALS AND DISEQUILIBRIUM In a free enterprise system, workers aim at maximizing their wages.  Hence, it would be expected that workers would move form low-paying indus

Commercial Banks A Commercial Bank is a financial institution which undertakes all kinds of ordinary banking business like accepting deposits, advancing loans and is a member

When Burton Cummings graduated with honors from the Canadian Trucking Academy, his father gave him a $350,000 tractor-trailer rig. Recently, Burton was boasting to some fellow truc

The relationship between, total expenditure and price elasticity of demand has summed up in the below table: Table: Elasticity and Consumption Expenditure Elas

Keynes and  Mitchell Description According to Keynes description, a trade cycle is characterised by alternating expansionary and contractionary wavy movements in the aggregate

THE IMPACT OF INFLATION Inflation has different effects on different economic activities on both micro and macro levels.  Some of these problems are considered below: i.

Q. What do mean by Convex Isoquant? Isoquants are convex to the origin: At any point of an isoquant,the slope is negative. Its numerical value measures the marginal rate of te

how to solve problems using derivatives ?