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opponents.4. Price rigidity and non-price competition.In an oligopoly, firms find it more comfortable tomaintain constant prices and to engage in various forms of non-price competition, such asadvertising and customer service, to hold, if not increase, their market shares. Price reductions,when they occur, are sporadic and usually come about only under severe pressures resulting fromweakened demand or excessive capacity.2.Describe the economic characteristics unique to the airlines.2
BSAB 415 – Airline Managementschedule frequency, and thus a more desirable product, gives every airline an incentive to use every airplane as intensively as possible. Although this strategy makes sense for each individual
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Economics,Economics of production,Airline Management