Examlex

Solved

In a Recent Fare War, WestJet Reduced the Price of Its

question 61

Essay

In a recent fare war, WestJet reduced the price of its one-way airfare from Vancouver to Winnipeg from $198 to $138 to match Air Canada. WestJet matched the fare reluctantly, saying it would cost the company millions of dollars in revenue for those tickets to be sold for less. Air Canada, on the other hand, believed the fare cut would increase its revenue even if rival airlines matched the lower fares. What different assumptions about the underlying price elasticity of demand for airline tickets on that route did each airline believe True?


Definitions:

Ultimate Cause

A term referring to the evolutionary explanations for why a biological trait or behavior occurs, focusing on survival and reproductive advantages.

Graylag Goose

A species of large grey goose, native to Europe and Asia, known for its significant role in studies of animal behavior, especially imprinting.

Sign Stimulus

A specific external sensory stimulus that triggers a fixed action pattern in an animal.

Innate Releasing Mechanism

A neurobiological process or mechanism that triggers an innate behavior in response to specific environmental stimuli.

Related Questions