Economics Assignment

Question 1 This name mainly tells us about the attain in the international marketplace crude color price and how has it get one of Malaysias airline companies, AirAsia Bhd. The companys CEO, tangent Sri Tony Fernandez announced that the drop in oil price burn down increase the profit rate of the low-cost airline. Tony Fernandez even hinted to the in the open eye(predicate) that in that location will be further low fares unattached as the current market demand is high. Besides that, it is give tongue to that the lowest price a barrel of crude oil had dropped to be below US$107 despite the increase of uncertainties in European economies. Previously in March, the global profit of the planetary Air Transport Association was estimated to decrease from US$3.5 meg to US$3 billion because of the rise in oil prices. Lastly, both AirAsia and Malaysia Airlines had signed a supplemental collaboration expurgate to achieve mutual success. I have managed to relate this article to one of the economic concept that I had learnt in class, which is legal philosophy of demand. The law of demand is a negative relationship between the price of a product and its quantity demanded (McConnell & Brue & Flynn, 2009). When the price of a product decreases, the quantity demanded will increase.

For instance, the drop in the market price of the oil will increase the import and export rate of AirAsia. This is because when the cost needed for shipping purposes are low, companies and traders would by all odds choose to ship their products in or out of the expanse to save costs. Other than that, the income effect can also be related to this article. This effect shows that a lower price of a product is able to increase the buying power of a consumer, allowing them to purchase that particular product, which will definitely result in the product having a higher quantity demand from the public (McConnell & Brue & Flynn, 2009). Thus according to this article, as the oil price declines, there will be lower fares, and the number of people who wants to trigger will... If you want to get a full essay, order it on our website: Ordercustompaper.com

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