Final answer:
Option (c), The question involves test marketing, which FlyHigh Airlines uses for their boxed snacks, and product differentiation, which HighFlyer Airlines considers for new airplanes with larger cabins.
Step-by-step explanation:
FlyHigh Airlines is engaging in a practice known as test marketing by selecting different markets to evaluate the sales of their boxed snacks on short flights. Test marketing involves experimenting with a product in specific areas or demographic segments before executing a broader launch. It allows companies to gather data on sales performance, consumer response, and potential profitability.
Another scenario presented involves HighFlyer Airlines considering the development of new airplanes with increased cabin space. This would be an example of product differentiation, a strategy where a company attempts to make its product stand out from competitors. However, it also entails analyzing the private rate of return on research and development (R&D) projects to determine their value and feasibility.
The practice of predatory pricing is evident when a large airline slashes prices to undermine newer competitors. Although this can lead to short-term losses for the dominating airline, the intention is to eliminate competition and gain the ability to raise prices once the competitive threat is neutralized.