the market price for seats is $400.
the equilibrium quantity of seats is 1600.
Now suppose that federal authorities limit the number of flights between the two cities to ensure that no more than 1,200 passengers can be flown.
Part 5
Using the line drawing tool,
illustrate this restriction on the graph at right. Label this line 'Restriction'.
.
.
Since the equilibrium quantity of seats is 1600 and the federal authorities limit the number of passengers to 1200, this means that the restriction on the number of flights will cause a decrease in the quantity of seats available.
To illustrate this restriction on the graph, draw a horizontal line at the quantity of 1200 on the quantity axis. This line will intersect with the demand curve at a specific price level, which will represent the new market price for seats considering the restriction.
Label this line as 'Restriction' to identify it as the line representing the limitation imposed by federal authorities.
Remember, federal authorities have limited the number of flights between the two cities to ensure that no more than 1,200 passengers can be flown.
There is no variation in the quantity.
Apologies for the confusion. If the quantity of seats remains constant at 1600, regardless of the restriction, then there is no need to draw a separate line on the graph. The equilibrium quantity of seats will still be represented by the intersection of the demand and supply curves.
Unfortunately, as an AI text-based bot, I am unable to draw or create visual content directly. However, I can explain the process to illustrate the restriction on the graph.
To illustrate the restriction on the graph, you would need to plot a vertical line at the horizontal axis value of 1,200. This vertical line will indicate the limited capacity for passengers.
Label this line as 'Restriction' to clearly denote the restriction on the graph.
To illustrate the restriction on the graph, follow these steps:
1. Start by drawing a vertical line at the quantity axis (x-axis) at 1,200 units. This represents the maximum number of passengers allowed to be flown.
2. Label the line as "Restriction" to clearly indicate its purpose.
The line should intersect with the demand and supply curves at the point where the quantity is 1,200. This represents the maximum number of seats that can be sold at the given price.