The Impact Of The Terrorist Attack On The Airline Travel Market In The Usa

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Joseph M


Date added:

January 11, 2013








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The worry about another hijack corrodes the confidence level of potential tourists resulting in the demand curve to shift left from D0 to D1 as shown in fig.1. The demand curve shifts to the left rather than a movement to the left because consumers’ confidence is not found as a variable on the axis...
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This shift indicates that the quantity of Airline travel demanded is lower at every price. There is no shift in the supply curve as the Airline travel industry is still having the same amount of capacity, i.e., the same amount of seats. The decreases in demand for Airline services reduce the equilibrium price from P0 to P1 and the equilibrium quantity from Q0 to Q1...
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