it is an economic document

1. ECO 1250: Micro and Macroeconomics
Module 3 Worksheet: Ecommerce at Yunnan Lucky Air
Complete this worksheet using the directions within to guide you. Submit your completed worksheet in the “Assignment and Grades”
tab in your course menu. When you have submitted this assignment for grading, please return to Module 3 for a module wrap-up.
Ecommerce at Yunnan Lucky Air
Name: Fatima Adam Bukar
Learner Id: 048840
Directions
Step 1. Examine the case study, “Ecommerce at Yunnan Lucky Air”.
Step 2. Answer the following prompts based on the information in the case study.
Question 1: Lucky Air was founded as a
low-cost airline. Describe the 2
opportunities Lucky Air had to give up to
focus on the lowest cost in the case study?
(Hint: Look at the section, “Betting on
Growth” in the case study)
Your answer
• The first opportunity is to follow springs airlines, they would need to convert
to a full service travel websites, higher tour packages is what they need to
bundle their self.
• The second opportunity is to focus one commerce, the reason is that Hainan
airlines is backed by IT operations, they will not worry about the cost
because it will enable them to do more in e- commerce
Question 2: Pick one of the opportunities
you think is the best option. What is the
opportunity cost of your selection?
e-commerce is the one I will pick which is my second opportunity. The tour
packages is the cost of this selection which will attract more consumers quickly.
Question 3: In the case study, it states,
“passengers in China increased to 387
million, a 16.8% jump from a year before.”
What will happen to price if the supply of
air travel stays the same? Why?
It will create short airlines because quantity demand is higher than quantity supply.
That is, number of passengers and numbers of flights.price of airline will increase
due to shortage and quantity demand will fall.

2. ECO 1250: Micro and Macroeconomics
Module 3 Worksheet: Ecommerce at Yunnan Lucky Air
Question 4: Based on the increase in
demand, how did the airline industry in
China respond?
The airline industry increased its competition because of demand that was increase
and 25% of percentages will be carried by low cost airlines.
Question 5: What affect did this response
have on price?
Airlines reduce the price for tickets, even though there is rules, some airlines expand
and provide tour packages to its passengers and that will make there prices to be
lower
Question 6: Which of the four market
structure does Lucky Air operate in? Why?
Options for the Market Structure:
1. Monopoly
2. Perfect competition
3. Monopolistic competition
4. Oligopoly
Lucky air operates in monopolistic competition, the reason is when airlines provide
air travel to the passengers, there will be product that will be different. They also
spend money when marketing there products to attract more consumers and this
will make new competitors to enter the market quickly.
Question 7: Based on Lucky Air’s market
structure and the supply-and-demand
environment for air travel in China, explain
why Lucky Airlines should focus on the
opportunity you chose in question 2.
The reason lucky air should focus on e-commerce is for china growth opportunity. If
lucky air focus on e-commerce, they will build more honest consumers, they will
also reduce cost and there rate of conversion will increase.