Outside the Flight Experience Itself,airlines Are Generating Revenue by Charging

question 15

Multiple Choice

Outside the flight experience itself,airlines are generating revenue by charging fees for credit cards,frequent-flyer programs,and access to airport lounges.This serves to

• A) increase competition.
• B) expand the profit pool.
• C) provide better customer service.
• D) satisfy regulators.

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Definitions:

Kinked-Demand Curve

A theory in economics suggesting that a firm's price will be rigid and unlikely to change because competitors will match price decreases but not price increases.

Oligopolistic Firms

Companies that operate in a market structure characterized by a small number of entities dominating the industry, influencing prices and market conditions.

Prices Frequently

A reference to how often prices change in a market, with some markets experiencing more frequent price adjustments than others.

Credible Threats

Statements or signs that a negative action could realistically be taken, used as a strategy in negotiations or competitive situations.