Multiple Choice
An oligopoly is a market that is characterized by which of the following features?
1
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14. Oligopoly
Characteristics of Oligopoly
Multiple Choice
Why are airline ticket prices difficult to predict?
A
Because airlines use dynamic pricing and yield-management systems that change fares based on remaining seats, booking time, demand, and competitor moves, making prices vary unpredictably.
B
Because international regulators fix airline fares at irregular intervals, causing sudden price changes.
C
Because all airlines follow a uniform published schedule of fares that depends only on distance flown.
D
Because airline fares are determined solely by fuel costs, which fluctuate randomly and directly set ticket prices.
Verified step by step guidance1
Understand that airline ticket prices are influenced by multiple factors that change over time, rather than being fixed or solely dependent on one variable like fuel costs or distance.
Learn about dynamic pricing, which is a strategy where airlines adjust ticket prices in real-time based on factors such as how many seats are left, how close the flight date is, and current demand levels.
Explore yield-management systems, which airlines use to maximize revenue by setting different prices for different seats and times, often changing prices frequently to respond to market conditions.
Recognize that competitor pricing also affects airline ticket prices, as airlines monitor and react to the prices set by other carriers on similar routes.
Conclude that because of these complex, interrelated factors and constant adjustments, airline ticket prices are difficult to predict accurately.
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