Why do airlines tend to lower ticket prices in the winter?
A)Supply is relatively variable, and a drop in demand lowers equilibrium price
B)Demand is relatively variable, and a drop in supply lowers equilibrium price.
C)A drop in both supply and demand lowers equilibrium price.
D)Supply is relatively fixed, and a drop in demand lowers equilibrium price.
E)Demand is relatively fixed, and a drop in supply lowers equilibrium price.

Question

Quizplus · Accepted Answer

In the winter, demand for flights often decreases as fewer people travel compared to peak seasons like summer or holidays. Airlines have a relatively fixed number of flights they can offer due to factors like fleet size and airport slots, making their supply relatively fixed in the short term. When demand drops and supply remains constant, the equilibrium price tends to decrease to attract more customers, hence airlines lower ticket prices.

Why Do Airlines Tend to Lower Ticket Prices in the Winter