When airlines were deregulated, airfares declined by 30 percent. Deregulation is an example of political forces:
A) letting the market move toward equilibrium, reducing excess supply.
B) letting the market move toward equilibrium, reducing excess demand.
C) making the market move away from equilibrium, creating excess supply.
D) making the market move away from equilibrium, creating excess demand.

Question

Quizplus · Accepted Answer

Deregulation allowed airlines to set prices based on market demand and supply, moving the market toward equilibrium and reducing excess supply, which led to a decrease in airfares.

When Airlines Were Deregulated, Airfares Declined by 30 Percent