According to Goolsbee and Syverson, how did incumbent airlines respond to the entry of Southwest Airlines?
A) They raised airfares just before Southwest's arrival and then cut airfares when Southwest began operating.
B) They lowered airfares just before Southwest's arrival and then raised airfares when Southwest began operating.
C) They began cutting airfare as early as one to two years before Southwest began operating from the same airport.
D) They kept airfares unchanged before Southwest's arrival and then lowered airfares when Southwest began operating.

Question

Quizplus · Accepted Answer

Incumbent airlines started reducing their airfares one to two years in advance of Southwest Airlines beginning operations from the same airport, in anticipation of the increased competition.

According to Goolsbee and Syverson, How Did Incumbent Airlines Respond