Ceteris paribus, if the price of jet fuel fell, what effect would it have on the market for air travel?
A)an increase in equilibrium price and an increase in equilibrium quantity.
B)an increase in equilibrium price and a decrease in equilibrium quantity.
C)a decrease in equilibrium price and an increase in equilibrium quantity.
D)a decrease in equilibrium price and a decrease in equilibrium quantity.

Question

Ceteris paribus, if the price of jet fuel fell, what effect would it have on the market for air travel?
A)​an increase in equilibrium price and an increase in equilibrium quantity.
B)​an increase in equilibrium price and a decrease in equilibrium quantity.
C)​a decrease in equilibrium price and an increase in equilibrium quantity.
D)​a decrease in equilibrium price and a decrease in equilibrium quantity.

Quizplus · Accepted Answer

If the price of jet fuel falls, the cost of providing air travel services for airlines falls, so the supply of air travel increases. This leads to a decrease in the equilibrium price of air travel and an increase in the equilibrium quantity demanded. So, the correct answer is C.

Ceteris Paribus, If the Price of Jet Fuel Fell, What