When an airline reduces its fares, other airlines typically match the action. But when an airline increases its fare, other airlines do not follow suit. Which oligopoly model cartel, price leadership, or kinked demand best fits the airline industry as described? Justify your choice and explain why the other models are less appropriate
The interdependence fits the kinked demand model, where firms match price cuts but not price increases. With cartels, firms agree on price and market share; there is no discussion of firms not matching price increases or decreases. With price leadership, one firm sets price and others follow, whether up or down.
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Economic theory suggests that ________ interest rates are ________ important than ________ interest rates in explaining investment behavior
A) nominal; more; real B) real; less; nominal C) real; more; nominal D) market; more; real
The advantages of the M-Form of firm organization is
a. divisions can respond more easily to change b. it is easier to maintain customer relationships c. there is less coordination across the firm's divisions d. all of the above
Positive externalities lead to under supply in a market
Indicate whether the statement is true or false
In 1944 the U.S. economy was temporarily operating at point _________.
A. A
B. B
C. C
D. D