At any given airport, the airlines hold long-term leases for passenger loading gates. New gates cannot be added without approval of the airlines. Frequent flier programs are also common in the industry. It is, therefore, more difficult for a new airline to enter a given airport (market). Such factors:
(i) are called barriers to entry.
(ii) tend to decrease the contestability of the air travel market.
A. i and ii
B. i not ii
C. ii not i
D. neither i nor ii
Answer: A
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In general, a nation can enjoy a higher standard of living by ________ than by being self-sufficient.
A. specialization and trading B. taxing imported goods C. increasing its versatility D. avoiding trade with other nations
A major difference between a tariff and a quota is that a tariff:
a. will reduce imports, but a quota generally will not. b. can easily be rescinded, but a quota cannot. c. will reduce the ability of foreigners to obtain the purchasing power to buy a nation's export goods, but a quota will not affect the foreign demand for the nation's exports. d. typically generates tax revenue, while a quota does not.
The terms "long-run view" and "classical view" can be used interchangeably
a. True b. False
An example of “cream skimming” is when
A. a firm charges the same price to all consumers, even though costs for some are higher. B. a firm offers a reduced price to the best-paying customers of their competitors. C. a firm offers a reduction in price on a package sale of two items. D. All of these are examples of “cream skimming.”