In markets entered by Southwest Airlines, gains in passenger traffic and profits
A)went primarily to airlines already in those markets.
B)were evenly distributed among airlines in those markets.
C)went almost entirely to Southwest.
D)were minimal, as the highly inelastic demand for air travel meant reduced revenues for all airlines in those markets.

Question

Quizplus · Accepted Answer

Southwest Airlines is known for its low-cost model, which often leads to significant increases in passenger traffic and profits for the airline itself when it enters new markets. This phenomenon, known as the "Southwest Effect," typically results in lower fares and increased flight options, attracting more passengers to Southwest at the expense of other airlines in those markets.

In Markets Entered by Southwest Airlines, Gains in Passenger Traffic