A study conducted by economists at the University of Chicago found that when Southwest Airlines begins flying a new route, ticket prices on other airlines for that route ________, indicating that airlines ________.
A) stay relatively unchanged; may begin practicing implicit price collusion when Southwest enters a market
B) drop by an average of 29 percent; may have been practicing implicit price collusion before Southwest's entry into the market
C) rise by an average of 65 percent; know they can practice implicit price collusion once Southwest announces it is entering a market
D) first drop and then rise back to their original levels; temporarily stop practicing implicit price collusion until Southwest becomes established, then return to their collusive pricing strategies
Correct Answer:
Verified
