There Is Much Evidence to Suggest That Airlines Are More

question 207

Multiple Choice

There is much evidence to suggest that airlines are more likely to match price cuts than price increases.Which of the following best explains this evidence?

• A)The law of demand which states that an increase in price leads to a decrease in quantity demanded.
• B)No one airline wants to be the first to renege on a tacit collusive agreement in which all airlines implicitly agree to match price cuts but not price increases.
• C)An airline fears that if it does not match a price cut, its sales may fall considerably but if it does not match a price increase, it will be able to attract customers away from its rivals.
• D)Airlines have different costs of production and therefore it is more difficult to agree on a price increase than on a price decrease.

---

Definitions:

Succession Planning

The process of identifying and developing new leaders who can replace old leaders when they leave, retire or pass away.

Save Money

Strategies or actions taken to reduce costs and expenditures, optimizing resource use to improve financial health.

Grooming

The practice of cleaning and maintaining one's appearance for social or professional reasons.

Successor

An individual who follows another in a specific role or position, often as a result of planned succession or replacement.