Question

Airline fares fluctuate widely over time, but they tend to move up and down together across carriers. Is this a characteristic of an oligopoly industry? Why or why not? Please minimum 150 words per answer for this question. Thank you.

Answer 1

Ans...
Yes. it is a example of oligopoly industry. In oligopoly market, the market is shared by small number of producers which means there is a limited competition and in oligopoly the firms change thier prices according to the behaviour of thier rival firm. so when A fairline lower thier prices then its rival fairline B aslo has to lower thier price to acquire the market demand and when both firm known each other behavior of changing price mechanism then they do mutual agreement of charging prices to avoid future circumstances.