According to the Bureau of Transportation Statistics, due to an increase in demand, the average domestic airline

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Question:

According to the Bureau of Transportation Statistics, due to an increase in demand, the average domestic airline fare increased from $367.17 in the fourth quarter of 2005 to $381.99 in the first quarter of 2006, an increase of $14.82. The number of passenger tickets sold in the fourth quarter of 2005 was 178.1 million. Over the same period, the airlines’ costs remained roughly the same: the price of jet fuel averaged around $1.85 per gallon in both quarters (Source: Energy Information Administration), and airline pilots’ salaries remained roughly the same (according to the Bureau of Labor Statistics, they averaged $135,040 per year in 2005). Can you determine if, and by how much producer surplus has increased as a result of the $14.82 increase in the average fare?

2 The accompanying table shows the supply and demand schedules for used copies of the first edition of a textbook. The supply schedule is derived from offers at amazon.com. The demand schedule is estimated.

Price of Book	Quantity of Books Demanded	Quantity of Books Supplied
$60	30	0
$65	27	3
$70	25	7
$75	20	7
$80	17	8
$85	15	15
$90	12	16
$95	9	17
$100	8	29
$105	2	31
$110	0	34

Calculate consumer and producer surplus at the equilibrium in this market

Now the second edition of this textbook becomes available. As a result, the willingness to pay of each potential buyer for a second-hand copy of the first edition falls by $20. In a table, show the new demand schedule and again calculate consumer and producer surplus at the new equilibrium.