Performance and Risks in the European Economy
Year: 2011
Type: conference-paper
Abstract: The decrease of the charge/unit price determines the extension of demand, as well as the increaseof the amount of a product/service required on the market. The relationship between the evolution ofcharge/unit price (the independent variable) and the market demand of a good/service (the dependentvariable) can be illustrated in a table, a function or a graph. The causal relationships between the change ofthe charge/unit price of a good/service and the change of the amount required represent the essence of thegeneral law of demand. This law is not fully valid when it comes to services. There are situations whichapparently contradict the general law of demand: there are buyers who mostly use the services of a companyeven if this asks for higher prices on the grounds of saving time, which reflects the relationship between theprice and the quality of the service offered. Price increase can be accompanied by the increase of the quantityrequired when the difference in price can be compensated for by the growth in quality. The increase ordecrease of demand can be determined, at a certain offer, by the change of the charge/unit price of agood/service. The following paper deals with the limits of the demand shift under the conditions of a pricechange. The direct competition between the airlines offering full services (classical companies) and those thatdo not offer any auxiliary services (low cost) is increasing in the entire world.
Author: Florian Marcel Nuță
Institution: Danubius International University
Language: English
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W3211889072