The airline dominating Charlotte, North Carolina, once contended that it could not overcharge for fear of potential competition, if not at Charlotte, then at Raleigh, a two-hour drive away. Do you find this argument compelling, given the theory of contestable markets?
The theory of contestable markets holds that oligopolists will have to charge competitive prices to ward off potential entry. But entry costs may be very high, especially if there are no gates in Charlotte. Also, Charlotte residents would rather not travel to Raleigh to depart. So the airline is likely to charge above the competitive price.
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Janae purchased 10 Bitcoins in February with the intention of holding them until October and then selling them at a higher price. Janae was engaged in
A) diversification. B) arbitrage. C) speculation. D) asset liquification.
When the central banks of various countries intervene in the foreign exchange market to maintain an exchange rate, this type of exchange rate system is called a ________ exchange rate system
A) fixed B) flexible C) all of the above D) none of the above