Evaluate and present economic basis for limit pricing

Assignment Help Business Economics

Reference no: EM133186278

Reading:

- Chapter 13: Advanced Topics in Business Strategy

- Chapter 14: A Manager's Guide to Government in the Marketplace

Evaluate and present the economic basis for limit pricing, and identify the conditions under which a firm can profit from such a strategy.

Between 1995 and 1997, American Airlines competed in the Dallas/Ft. Worth Airport against several other low-cost carriers. In response to these low-cost carriers, American Airlines reduced its price and increased service on selected routes. As a result, one of the low-cost carriers stopped service, which led American Airlines to increase its price.

- Why do you think a lawsuit was filed against American Airlines?

- Why do you think American Airlines prevailed at trial?

Reference no: EM133186278

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