Factors determining demand and supply

Case Study: Demand Analysis


Student Name

Lecture Name




Case Study: Demand Analysis


Consumer preferences and financial resources have a significant impact on the demand for air travel. The purpose of this assignment is to provide a deeper understanding of the factors that determine the prices and elasticities of goods and services within the aerospace and aviation industries. Since the world’s population is continuously increasing, there is a constant need for more flights in the aviation industry. In this regard, my preferred market would be the Malaysian airline business, which includes organizations like Malaysia Airline System Berthed (MAS), Firefly, which is a subsidiary of MAS, and Berjaya Air. The subject of my conversation would be airline tickets.

Oligopoly is the best way to characterize the market structure of the Malaysian airline industry. This structure indicates that multiple enterprises compete with one another for the available travelers. This structure also has a higher degree of competition compared to monopoly. Passengers, both domestic and international, make up the vast majority of these airlines’ client base. Air travel has very few viable alternatives since most people who can afford it choose modes of transportation that are both more expedient and more comfortable. Since the bullet train is only available within the country and does not travel to any other countries, it might be considered a minor rival.

Factors determining demand and supply


This is a significant component that plays a role in determining the level of demand and availability of airline services in Malaysia. For the vast majority of people, air travel is an extravagant luxury. The demand for such a service is very variable because it is used primarily by the wealthy, despite the fact that this mode of transportation is extremely pricy (Craig, 2019). The proliferation of low budget airlines and the threat posed by unrestricted users have made travelers increasingly price-conscious. Passengers, on the other hand, may be less price conscious when the revenue gained by these ticket revenue can become insignificant in relation to the overall cost of the trip. It is essential to have the understanding that the components of a trip, such as its routes and modes of transportation, are easily interchangeable. When passengers consider their many alternatives, it may be possible for them to reach a conclusion regarding their flight in a short amount of time.

Customer’s level of income

According to the data available, the income elasticity of demand for air travel is exceptionally high. When people have more disposable income, they are more likely to splurge on non-essentials like plane tickets. Long-distance travel would benefit from higher income elasticities whenever a country’s economy is growing rapidly. Research also shows that those in the middle class have a preference for shorter commute times compared to those in the upper class.

The cost of other related goods

These costs have an effect not only on the demand but also on the supply of airline tickets. If the price of a complementary commodity went up, it would have the same effect on the price of flight tickets, which would, in turn, lead to a reduction in the number of people wanting to buy tickets.


The availability of alternatives can also have an impact on the cost of air travel. In consequence of this, the demand would eventually become exceedingly elastic. Alternative modes of transportation available in the air industry could include high-speed automobiles and bullet trains.

The Number of customers available

A substantial number of purchasers would, in turn, correspond to demand for airline tickets, which would result in a rise in the number of supplies made available by airlines.


When there is a prolonged period, the demand elasticity will be able to grow because customers will be able to modify their behaviors to the pricing throughout the course of the longer period of time.

Demand function using multiple Independent variables For Malaysian airline

Notation Functional Specification Factor


Pope P0P1*P0P2*10^-5 Population
Bedim Bed1*Bed2*10^-6 The capacity of the beds
Dusty Distance on road Distance
Trite Dummy variable(0,1) Transit
Prick Average ticket price Price
Cetin Number of airlines on the route Count of Airline
Trim Percentage of flight choices Travel match
Scrim Availability Schedule
Tami The time between starting and stopping Travel Time


Logarithmic Regression Model

Logy = 0 + 1LogX1 + 2LogX2 + 3LogX3 +…,

When in Liner form it becomes

LogPaxij = 0 + 1LogPrcij + 2LogPopij + 3LogBedij + Trmij+5Ttmi6Trtij 7Cntij +

8Scdij + 9Dstij,

How Changes in different variables influence equilibrium prices and quantity

Flight costs can be estimated using market data on passenger demand and airline capacity. The term “price equilibrium” describes the point at which buyers and sellers reach a mutually agreeable price. If either supply or demand were to shift, the resulting shift in equilibrium pricing would be correspondingly different (O’Connell & Williams, 2016). For example, when gas is cheap, airlines can produce more plane tickets. Therefore, a wider variety of products would be made available at these costs. If production were to remain constant, the demand curve would shift to a new equilibrium, one that would be able to work through the glut of available product on the market. Buyers, who would be the people in this scenario, would have the ability to get more tickets at a significantly reduced cost.

The following factors influence the instantaneous changes in pricing trends for airplane tickets in the industry of airlines. These variables include things like the demand for seats, the cost of gasoline, the length of the routes that are offered, and the availability of seats (Wang, Zhang, & Zhang, 2018). The cost of fuel is one of the most important factors that determines pricing changes in the transportation business. The cost of flying and the operating costs of airlines both go up whenever the gross price of crude oil goes up. Because oil is a resource that is used up extremely quickly, the current state of the oil industry around the world is a highly significant factor. Since oil is a necessary component of airplanes, there is a strong correlation between the cost of the former and the cost of airline tickets (Scott, 2018).

A change in demand caused by a shift in customer preferences would almost certainly have an effect on the price that is offered on the market. An excellent illustration of this is the way in which the earthquake in Japan induced a change in the demand for tourist’s tickets in that country (Spasojevic, Lohmann, & Scott, 2018). The reduction in preference has the potential to bring about an internal shift in demand. A delay or breakdown in the global economy is another important aspect that plays a role in determining the price of airline tickets. When businesses are unable to generate as much revenue as they formerly did, they are compelled to reduce their overall revenue in order to keep their profit margins at the same level. However, it is essential to keep in mind that the drop in air travel is not due to the costs associated with flying; rather, it is due to the economic downturn that has been caused by the inability of enterprises to pick up. During the Asian crisis that occurred in the late 1990s, for instance, the number of individuals traveling to these nations was able to decrease by a good amount, which is an example of a beneficial thing.

When it comes to airplane travel, another important consideration is the government and the legislation it enacts. For instance, under this scenario, MAS, with the assistance of the Malaysian government, might be able to contact Singapore airlines about establishing a direct flight between Kuala Lumpur and Singapore in response to the continuously growing demand for such a service (Daley, 2016). The two administration are on good diplomatic relations and will come to an agreement since it is beneficial to the economic growth and development of both countries.


The aviation industry in Malaysia can be described as being extremely dynamic, with demand and supply at appropriate times playing a significant role in shaping the industry to a large extent. When discussing this industry, it is impossible to determine whether a statement is accurate or untrue because it is continuously evolving. However, the majority of economists agree that the number of airline tickets sold doubles after every ten years.



Craig, C. (2019). Estimating the income elasticity of demand for international air travel.

Daley, B. (2016).  Air transport and the environment. Routledge.

O’Connell, J. F., & Williams, G. (2016). Air transport in the 21st century: key strategic developments. Routledge.

Wang, K., Zhang, A., & Zhang, Y. (2018). Key determinants of airline pricing and air travel demand in China and India: Policy, ownership, and LCC competition.  Transport Policy,  63, 80-89.

Spasojevic, B., Lohmann, G., & Scott, N. (2018). Air transport and tourism–a systematic literature review (2000–2014).  Current Issues in Tourism,  21(9), 975-997.

Get Professional Assignment Help Cheaply

Buy Custom Essay

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

  • Plagiarism free papers
  • Timely delivery
  • Any deadline
  • Skilled, Experienced Native English Writers
  • Subject-relevant academic writer
  • Adherence to paper instructions
  • Ability to tackle bulk assignments
  • Reasonable prices
  • 24/7 Customer Support
  • Get superb grades consistently

Online Academic Help With Different Subjects


Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.


Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!


While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.


Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.


In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.


Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.


We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!


We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.


Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

  • When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
  • We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

  • The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
  • We will have a different writer write the paper from scratch.
  • Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essaysmile and order essay PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

order custom essay paper