Final answer:
The O’Hare expansion likely benefits airlines and construction companies due to increased capacity and job opportunities but may negatively impact local residents with noise and reduced property values. Environmental concerns could also arise, reflecting the balance of economies and diseconomies in urban and industry growth.
Step-by-step explanation:
The most likely winners and losers as a result of the O’Hare expansion include several groups. a) Airlines operating at O'Hare will benefit from increased capacity, and local businesses may experience growth due to increased passenger traffic. On the flip side, local residents near O'Hare may face increased noise and traffic, potentially leading to a decline in property values. Additionally, construction companies involved in the expansion project will see increased business and job opportunities. Still, environmental groups may express concerns about the ecological impact of the expansion, potentially leading to legal challenges.
The scenario described reflects broader economic principles. Economies of scale can yield significant advantages for cities and industries alike, such as reduced costs and increased efficiency. However, these benefits can eventually turn into diseconomies when growth leads to issues such as traffic congestion, pollution, and overstretched resources. For instance, the airline industry has experienced both positive and negative effects from deregulation and increased competition, which reduced airfares and improved efficiency but also raised concerns over competition due to airline mergers.
In a specific case of competitive dynamics within the airline industry, a large airline might engage in predatory pricing to force a new entrant out of the market. The new, small start-up airline, unable to compete with slashed prices, may exit the business, after which the incumbent can raise prices again—a situation that potentially harms consumer interests in the long run.