Reference no: EM131266348
The Texas state bird
Southwest Airlines is a major carrier based in Texas, and has made a strategy of cutting fares drastically on certain routes with large effects on air traffic in those markets. For example on the Burbank-Oakland route the entry of Southwest into the market caused average fares to fall by 48 per cent and increased market revenue from $21,327,008 to $47,064,782 annually. On the Kansas City-St Louis route, however, the average fare cut in the market when South west entered was 70 per cent and market revenue fell from an annual $66,201,553 to $33,101,514.
Questions
1. Calculate the PEDs for the Burbank-Oakland and Kansas City-St Louis routes.
2. Explain why the above market elasticities might not apply specifically to Southwest.
3. If Southwest does experience a highly elastic demand on the Burbank-Oakland route, what is the profit implication of this?
4. Explain why the fare reduction on the Kansas City-St Louis route may still be a profitable strategy for Southwest.
|
Identify which leaders were involved in the communication
: Prepare a powerpoint that illustrates your analysis of the change and in 1,050 words, cover the following: Identify which leaders were involved in the communication
|
|
What behaviors do you look for when building your teams
: Watch the below video from Karl McDonnell, CEO of Strayer University, titled "What behaviors do you look for when building your teams?"
|
|
Determining the growing securitization
: 1. Why might growing securitization make it harder for bank supervisors to keep track of risks to the ?nancial system?
|
|
What exactly are ethical aspects involved in your decision
: Is this an ethical issue? What exactly are the ethical aspects involved in your decision? Who else is involved, or should be involved, in this decision? Who has a stake in the outcome?
|
|
Burbank-oakland and kansas city-st louis routes
: 1. Calculate the PEDs for the Burbank-Oakland and Kansas City-St Louis routes. 2. Explain why the above market elasticities might not apply specifically to Southwest. 3. If Southwest does experience a highly elastic demand on the Burbank-Oakland rout..
|
|
Have you experienced either visionary leadership
: What type of leader do you feel would be the most effective for your Capsim Company? Have you experienced either visionary leadership or strategic leadership, as presented by Rowe?
|
|
Always increase consumer surplus
: What are the welfare effects (who gains who loss the dead weight loss) of a price ceiling? Price floor? Tax? Subsidy? Will the price ceiling always increase consumer surplus?
|
|
Degree price discrimination
: Give 2 example of third degree price discrimination. Can it be effective if there is reselling between groups? How does a car salesperson practice price discrimination and how does the ability discriminate correctlyaffect his earning?
|
|
What steps must one take beforehand
: What are some arguments for and against the moral permissibility of whistle-blowing? Before whistle-blowing is morally permissible, what steps must one take beforehand? When would whistle-blowing not be morally permissible?
|