Identify and explain the factor of demand that led to the rise in price of air tickets for the Singapore: economics Assignment, NTU, Singapore

Use information from the passage to answer the questions below. Fares for Singapore-Malaysia route nearly triple for Chinese New Year period SINGAPORE – Travellers planning to make a trip to Malaysia during the Chinese New Year period in 2024 can expect to fork out up to three times more for airfare and bus tickets.More than three months before the festive occasion on Feb 10 and 11, many from Singapore who plan to celebrate in Malaysia have already snapped up tickets to escape paying inflated prices caused by the expected spike in demand.

One of them is Ms Cheyenne Lim, who bought return flight tickets to her parents’ home town of Penang for three people on AirAsia for $273 each. She bought the tickets for her Feb 10 to 18 trip in March 2023, almost immediately after they were made available on the airline’s website. As at Wednesday, the same route costs $526.

Bus companies have also raised ticket prices, citing reasons such as a shortage of bus drivers and the expected traffic jams at the Causeway. The price increase is to account for longer travel durations due to traffic jams at the Causeway and higher payments to its bus drivers. Source: www.straitstimes.com, 2 November 2023

(a) Identify and explain the factor of demand that led to the rise in price of air tickets for the Singapore – Malaysia route. Use a demand and supply diagram to aid your explanation. (4 marks)

(b) Identify and explain the factor of supply that led to the rise in price of bus tickets for the Singapore – Malaysia route. Use a demand and supply diagram to aid your explanation. (4 marks)

(c) Explain the relationship between air tickets and bus tickets for the Singapore – Malaysia route.