Which of the Following Explains Why Frequent Flier Programsreduce Contestability

question 14

Multiple Choice

Which of the following explains why frequent flier programsreduce contestability in the airline industry?

• A)Frequent flier programs make demand for each airline more elastic and thus lead to more competition.
• B)Frequent flier programs make demand for each airline more inelastic and thus lead to more monopoly power and
• Higher prices.
• C)Frequent flier programs increase demand for each airline, ultimately leading to increased competition and lower
• Prices.
• D)Frequent flier programs lead to lower switching costs and therefore less contestability in the market.

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Definitions:

Process Inadequacy

Occurrences when established methodologies or procedures fail to produce the desired outcomes, indicating a need for refinement or replacement.

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Inefficient or incorrect procedures or methods that hinder achieving objectives or optimal performance.

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An entity, such as a company, non-profit, or club, structured and managed to fulfill a particular purpose or set of objectives.