At any given airport,the airlines hold long-term leases for passenger loading gates.New gates cannot be added without approval of the airlines.Frequent flier programs are also common in the industry.It is,therefore,more difficult for a new airline to enter a given airport (market).Such factors:

(i) are called barriers to entry.
(ii) tend to decrease the contestability of the air travel market
A)i and ii
B)i not ii
C)ii not i
D)neither i nor ii

Question

At any given airport,the airlines hold long-term leases for passenger loading gates.New gates cannot be added without approval of the airlines.Frequent flier programs are also common in the industry.It is,therefore,more difficult for a new airline to enter a given airport (market) .Such factors:

(i) are called barriers to entry.
(ii) tend to decrease the contestability of the air travel market

(i) are called barriers to entry.
(ii) tend to decrease the contestability of the air travel market
A)i and ii
B)i not ii
C)ii not i
D)neither i nor ii

Quizplus · Accepted Answer

Both i and ii statements are correct. The long-term leases held by airlines for passenger loading gates and frequent flier programs make it more difficult for new airlines to enter an airport and, therefore, decrease the contestability of the air travel market. These factors are considered barriers to entry.

At Any Given Airport,the Airlines Hold Long-Term Leases for Passenger