A Study Conducted by Economists at the University of Chicago

question 112

Multiple Choice

A study conducted by economists at the University of Chicago found that when Southwest Airlines begins flying a new route, ticket prices on other airlines for that route ________, indicating that airlines ________.

• A) stay relatively unchanged; may begin practicing implicit price collusion when Southwest enters a market
• B) drop by an average of 29 percent; may have been practicing implicit price collusion before Southwest's entry into the market
• C) rise by an average of 65 percent; know they can practice implicit price collusion once Southwest announces it is entering a market
• D) first drop and then rise back to their original levels; temporarily stop practicing implicit price collusion until Southwest becomes established, then return to their collusive pricing strategies

---

Definitions:

Scientists

Individuals who conduct systematic research to increase knowledge and understanding, often specializing in fields within natural or social sciences.

Fossil Record

The totality of fossilized artifacts and their placement within the earth's rock strata, providing evidence about the history of life and past environments on Earth.

Bias

A tendency to lean in a certain direction, either in favor of or against a particular thing, person, or group, often in a way considered to be unfair.

Scientists

Professionals who conduct research and experiments to discover new knowledge and develop technologies.