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paying customers) on the Chicago–Columbus, Ohio, route that you service. The survey was conducted over five successive months. For each month, data collected include the one-way fare you charge per economy seat, the price charged by rival United Airlines, the average (monthly) per capita income in the combined Chicago–Columbus market, and the average economy-class load factor for both American and United Airlines. Assume that all other factors (the price charged by Southwest Airlines, the number of flights, the size of planes flown, and so on) have remained constant

a. On the Chicago–Columbus route, identify the arc price elasticity of demand for American economy seats, the arc income elasticity of demand for American economy seats, and the arc cross-price elasticity of demand for American economy seats with respect to United prices.

 b. Based on the data that you have collected, is United a substitute or complement for American in the Chicago– Columbus market? Explain.

 c. Are American’s economy seats a normal or inferior good in the Chicago–Columbus market? Explain.

 d. Would the estimated demand elasticity for your product be larger or smaller if consumers had been given more time to respond to any price change (for example, one year versus one month)?

 e. Compared with the price elasticity of demand for United and American, is the demand elasticity for economy seats in general in the Chicago–Columbus market (regardless of which airline provides them) larger or smaller? Explain. *2.10 Suppose that the demand elasticity for cigarettes is equal to 2.0. If the demand elasticity for Camel cigarettes is equal to 6.0, must there be at least some cigarette brands with a demand elasticity less than 2.0? 2.11 Suppose that the typical economics student is interested in consuming (and spends all her money on) only two commodities: economics study guides and horror movie passes. An unlimited supply of horror movie passes is available at a price of $5 per pass, while an equally unlimited supply of study guides covering endlessly different (and interesting) nuances in economics can be purchased for $30 each. The student currently purchases 20 horror movie passes and 10 study guides per semester. If the typical student’s price and income elasticities of demand for horror movie passes are both unity, what is the student’s cross-price elasticity of demand for study guides with respect to changes in the price of horror movie passes?