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"The Operator of the Tunnel That Links Britain and France

question 6

Essay

"The operator of the tunnel that links Britain and France, Eurotunnel, said that commercial and tourist traffic using its car and coach shuttle service had fallen sharply in 2004, leading to a drop in operating revenues of 4%. Eurotunnel's chief executive, Jean-Louis Raymond, blamed cut-throat competition from budget airlines." (news story, January 2005)
A) If Mr. Raymond is correct, are the services of airlines and Eurotunnel substitutes or complements?
B) Use demand and supply analysis to explain how lower airfares between Paris and London impact the market for the shuttle services of Eurotunnel.


Definitions:

Meta-Communication

The act of communicating about communication, often used to clarify or interpret the underlying message in an interaction.

Media Richness

A theory that evaluates communication media based on their ability to reproduce the information sent over them without loss or distortion.

Feedback

Information given to an individual or group about their performance or behavior, intended to guide future improvements.

Fundamental Attribution Error

A cognitive bias that leads individuals to attribute others' actions to their character or personality while underestimating situational factors.

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