Operating in the southwestern states, PuddleJumper Airlines hopes to avoid entering the price war that currently is taking place between several airlines on the east coast. The best strategy to avoid severe price competition is to
A) provide frequent travelers the added value of special fringe benefits.
B) cut costs and services in order to maintain profit margins.
C) reduce flights and in-flight services, and lay off employees.
D) determine the break-even price and charge slightly more than that.

Question

Quizplus · Accepted Answer

It is usually difficult for small firms to compete against larger firms solely on the basis of price. Nonprice competition works much better.

Operating in the Southwestern States, PuddleJumper Airlines Hopes to Avoid