Suppose Two Brothers Own Identical Skydiving Companies but Have Decided

question 57

Multiple Choice

Suppose two brothers own identical skydiving companies but have decided to experiment with different pricing structures.The older brother's company,Air Adventures,sets its prices using the profit-maximizing rule,while the younger brother's company,Sky Warriors,sets its prices using a two-tiered,price-discrimination model.Assuming that both companies face the same market demand curves,marginal costs,and costs of production,and wield significant market power for their service area,which of the following is most likely to occur?

• A) Air Adventures will generate a similar net revenue to Sky Warriors.
• B) Sky Warriors will generate a higher net revenue than Air Adventures.
• C) Sky Warriors will generate a lower net revenue than Air Adventures.
• D) Air Adventures will generate a higher net revenue than Sky Warriors.
• E) Sky Warriors will eventually switch to the Air Adventures model.

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Definitions:

Skills Approach

The Skills Approach to leadership suggests that effective leadership is largely determined by an individual's capabilities, skills, and knowledge, which can be developed and enhanced over time.

Practice And Instruction

Refers to the process of learning and teaching through hands-on experience and formal educational activities.

Specific Techniques

involves particular methods or strategies employed to accomplish a task or solve a problem efficiently.

Mumford's Skills Model

A framework that outlines the capabilities that leaders need, including problem-solving skills, social judgment skills, and knowledge.