AirwaySim

General forums => General forum => Topic started by: EquinoxAirlines on August 29, 2014, 11:00:09 PM

Title: Is price elasticity modeled?
Post by: EquinoxAirlines on August 29, 2014, 11:00:09 PM
I did use search, but I couldn't find a straight answer.

Is price elasticity simulated?  If it is, is it quite an advanced model or a basic price goes up / demand drops simulation?
Title: Re: Is price elasticity modeled?
Post by: Sami on August 30, 2014, 01:03:15 AM
Yes, partly. You can induce more demand than showed in the graphs with low prices (or otherwise "good service") and the other way around; very high prices will scare the displayed nominal demand away.
Title: Re: Is price elasticity modeled?
Post by: Hillians on August 30, 2014, 07:36:05 AM
Partly is the key word in sami's reply
dont expect drastic demand changes if you drop prices 50%, instead expect red numbers on your income statement.