Answer to Question #72108 in Macroeconomics for Mbee
Explain how both demand and supply factors are likely to affect the price of rail tickets in the UK? Also are the answers below correct?
Population in the UK is increasing, which shifts the demand curve to the right. This means that there is an increase in demand which means people will purchase the rail tickets at any given price
If rail ticket prices increase, the demand will fall as people will go look for alternatives such as public transport or using a bicycle which would be cheaper
Population in the UK is increasing, which shifts the demand curve for railway tickets to the right. An increase in demand causes the equilibrium rail ticket prices to increase If cost of electricity falls, the supply of railway transportation will increase according to decrease in production costs. This will cause the decrease in equilibrium price.