Travel websites such as Travelocity tend to offer reservation services for multiple travel modes.This is because
A) the firms have contractual obligations to offer reservations for airlines and railroads, for example.
B) the firms have statutory obligations to offer reservations for airlines and railroads, for example.
C) once the firm has the reservation technology for airlines, there are economies of scale in offering the same service for railroads.
D) once the firm has the reservation technology for airlines, there are economies of scope in offering the same service for railroads.

Question

Quizplus · Accepted Answer

Once the firm has developed the technology and expertise to offer reservation services for one travel mode, such as airlines, there are economies of scope in offering the same service for other travel modes, such as railroads. This means that the firm can capitalize on its existing resources and knowledge to expand into other areas, leading to lower costs and potentially higher profits. This is known as economies of scope, which is a key reason why travel websites tend to offer reservation services for multiple travel modes.

Travel Websites Such as Travelocity Tend to Offer Reservation Services