Explain whether Delta Airlines' sales are likely to fluctuate more or less than the sales of each of the following firms as the economy moves from recession to expansion and back to recession
Whirlpool Corporation (appliance manufacturer)
Taco Bell
The Boeing Company (aircraft manufacturer)
GameStop (video game sales and rentals)
Delta's sales are likely to fluctuate during the business cycle less than the sales of Whirlpool and Boeing, but more than the sales of Taco Bell and GameStop. Appliances and aircraft are expensive durable goods that are sensitive to changes in economic conditions. On the other hand, fast food and video games are relatively inexpensive consumer goods that are relatively less sensitive to changes in economic conditions.
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Suppose that all pizza companies have the same costs and the minimum average total cost is $12 per pizza. The pizza companies have an efficient scale of 100 pies per night
In the small town of Coatsville, at the price of $12 per pizza the quantity demanded is approximately 300 pizzas per night. This market, therefore, can best be characterized as A) perfectly competitive. B) a natural monopoly. C) a natural duopoly. D) a natural oligopoly.
From the Keynesians' perspective, a short-run Phillips Curve exists because
A) wages and prices are perfectly flexible. B) money demand is unstable. C) investment is unstable. D) wages change more slowly than the price level.