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.

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Definitions:

Direct Examination

The examination of a witness by the attorney who calls the witness to the stand at trial to testify on behalf of the attorney’s client.

Plaintiff

A person or entity that brings a lawsuit against another in a court of law.

Summary Judgment

A legal judgment made by a court without a full trial, based on the presented facts where there is no dispute.

Motion To Dismiss

A legal filing requesting that a court dismiss a case for reasons such as lack of jurisdiction, failure to state a claim, or other legal defenses.