Now, assume that American's own price elasticity of demand that you calculated in part a holds true for even lower prices (in other words, assume elasticity is linear). The plane used on these flights has 310 seats. A load factor of 70 means 70% of the seats are filled. A load factor of 72 means 72% of the seats are filled. What price would it take to fill all seats? (As you do your calculations, differentiate between percent and percentage points.)
Level of Detail: Only answer needed
Other Requirements: Month American's
price United's
price Monthly per
capita income American's
load factor (Q) United's
load factor (Q)
1 $110 $112 $1,900 65 60
2 110 110 1,900 62 63
3 110 110 2,100 70 66
4 109 110 1,900 70 61
5 108 110 1,900 72 59
Part 1:
1.) Own-price elasticity of demand for American's economy class seats: Based off of months 4 and 5 and mid-point method, the own-point elasticity value = 5.57
Now, assume that American's own price elasticity of demand that you calculated holds true for even lower prices (in other words, assume elasticity is linear). The plane used on these flights has 310 seats. A load factor of 70 means 70% of the seats are filled. A load factor of 72 means 72% of the seats are filled. What price would it take to fill all seats?