Question

Louis is a student at Texas A&M who just secured a summer internship working for the marketing department of Southwest Airlines. He is assisting Marlene, one of the marketing managers, with a competitive assessment of the U.S. market. Marlene wants him to think outside of the box when assessing the competition. She tells him to think beyond direct competitors to any competitors that might be able to offer similar services as Southwest.

Because Southwest Airlines operates in a(n) _____________, if American Airlines lowers prices, Southwest will likely _______________.

Answer 1

The correct answers would be Oligopoly, Do the Same. Because Southwest Airlines operates in an Oligopoly, If American Airlines lowers prices, Southwest will likely Do the same.

Step-by-step explanation:

Oligopoly is a market structure in which there are few producers or sellers of the same product. Common examples of businesses in oligopoly include Automobile industry, Airline Industry, Telecom industry, etc. So in this type of market structure, when one company lowers the prices of the products, the other companies have to do the same, otherwise customers will go to get the product from the producer who is selling it at a cheaper price.