Imagine that you have been asked by firms in the airline industry to use the industrial organization (I/O) model to help them identify reasons for their current performance problems. Which of the following conclusions might you draw?
A) Poor economic conditions have caused customers to reduce the number of times they travel by air.
B) War and international tensions have impacted the demand for airline services.
C) Increasing fuel costs have hampered the profitability of a number of airlines.
D) All of these.

Question

Quizplus · Accepted Answer

All of the given options are plausible reasons for poor performance in the airline industry based on the I/O model. Poor economic conditions and international tensions can reduce demand for air travel, while increasing fuel costs can affect the profitability of airlines.

Imagine That You Have Been Asked by Firms in the Airline