Ch 2: Supply and Demand

http://www.cnn.com/2009/TRAVEL/traveltips/10/12/holiday.air.travel/index.html

Summary

A recent article I read in the CNN gives advice about air travel from Rick Seaney, CEO of a consumer airline ticket research website. Farecompare.com says that holiday fares are up to 15% cheaper than last year because of low fuel prices during the recession.Although the fares have been increasing again, they are still considerably good deals. In addition, Seaney advises consumers to keep an eye on fares because they can fluctuate up to three times a day! The CEO also recommends to avoid flying on the busiest days because many airlines have made a $10 increase on all fares during those days. Lastly, check the baggage weight limitations for your airline to avoid paying the overweight luggage fee.

Connections

The obvious connection between this article and our text would be supply and demand. The article provides many examples of the factors and connection of supply and demand. Firstly, it mentions the recession and the effect on oil and fares. The recession would mean a change in general level of income, a factor affecting demand. A lower level of income results in a lower quantity demanded for anything. To combat the loss of demand, businesses must lower prices to attract more customers. Price is another factor affecting demand. Price and quantity demanded has an inverse relationship. When the price decreases, the quantity demanded increases. Also, the article also mentions that high-season and holidays will always cost more. This is true because the demand for air travel becomes more inelastic during high-season. Businesses can charge more and it will not have much effect on the demand side.

Reflection

The article gives many good travel and money-saving tips. Everyone wants more money in their pocket and would like to avoid spending any unnecessary bucks. By keeping an eye out for price fluctuations and having a flexible holiday plan, consumers may be able to save a good sum of money. The article showed how by staying an extra day, a person saved more than $100. In addition, I found the most helpful tip was about the luggage weight limitations. Passengers have to be very careful not to exceed the weight limitations because there will be more unnecessary dollars spent. Ultimately, a vacation is for the sole purpose of relaxing and having fun.