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The BA’s main reason for participating in this alliance is the possibility to reduce the ticket prices on air transportation due to the bigger amount of profit.
Despite the fact that anti-monopolistic committee allowed the partnership, the airline company Virgin Atlantic sets protests against it. The merge of two big companies will make them monopolists in their service sphere. As mentioned above the bigger profit allows the owners to provide better services, to have upgraded planes, to set lower prices on the tickets and what is even more important – to provide the better level of security. The company with average profits will be driven off the market. To fight this injustice they even applied the anti-advertising technique by putting the following message on their airplanes “No way to BA/AA. The headquarter of a new alliance will be located in London since the controlling interest belongs to BA.
Analyzing this article it is necessary to point out several issues that are to be considered in details. The first notion is monopoly since the new alliance represents the monopolistic leader in Europe. Though at the same time considering the whole world where BA+AA will have the third place in volume of passengers transportation, it is necessary to point out that in the scale of the world competition we can observe the monopolistic competition. The second notion that is to be analyzed is merge and strategic alliance in order to identify the type that BA and AA has.
In books on economics one can find the following definition of monopoly as: “If a certain firm is the only one that can produce a certain good, it has a monopoly in the market for that good (Samuelson & Marks, 2003). When studying monopoly in theory it is usually accepted that only one company operates in its industry - it produces and sells the whole volume of products. Though, in life monopoly is represented by a big company that controls the biggest part of
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The comparison is carried out between these two factors. In the ratio of Ann’s to peter’s case, Ann has a lower utility function than peter because peter is on medication. The amounts that peter will spend on medication makes him more vulnerable in spending.
The public’s demand for the two company’s products and services generated projected gains. Before the merger, several financial analysts opined that the proposed merger would be very successful (Baumol, 2011). Many quarters predicted the business after the merger will be rosy.
The demand side of the market comprises of the owner and the renter while the supply side comprises of the developer as well as the renovator. In order to analyze the demand and the supply factors a number of modifications need to be implemented in the microeconomic assumptions.
One of the significant areas of economics especially is macroeconomics which is a branch of economics that deals with the problems of a particular country or economic region comprised of several economic agents acting with their individual economic behaviors and the evaluation of the policies taken by the government of these countries in order to tackle those problems (Adams, 2002, p.
vaccinations against infectious diseases). Briefly suggest how government might intervene to correct this under-provision? 5 (C) The Consumer Price Index (CPI) is the official measure of inflation in the United Kingdom. Why might CPI not be an accurate measure of the costs of living for any given individual consumer?
Macro & Micro economics Introduction China is one of the fastest growing economies in the world. Being the second-largest economy, China has shown tremendous growth in the last three decades. According to the estimate of 2012, China’s GDP is US $12.38 trillion (CIA, 2013).
Name: Student Number: Short Essay: Macro & Micro Economics 1. Write a paragraph explaining why a “technology-based” water pollution-control standard might not be the most economically efficient (or cost-effective) way to achieve a given level of reduction in water pollution.
Macro & Micro economics Contents Contents 2 Introduction 3 Causes and Mechanisms of the collapse of the world trade 3 Current Trade Policies in Response to the Global Recessions 7 Policy responses on negative impact on the trade balance were implemented in the UK 8 Effectiveness of the EU trade policies in the long run 9 Conclusion 11 References 12 Introduction The Great Depression was one of the most severe economic downturn that the world faced during the twentieth century in the pre-World War era.
Thelaw of demand states that the higher the price of a good the lower the demand of the particular goodwithin the country (Dutta, 2006). On the other hand the lower the price of a good the higher the demand for the particular goods. The demand curve
Spillover effect is referred to the decrease in the wages of the non-union company. Generally after any organization increase wages then simultaneous they used to reduce the number of employees to maintain the balance in the profitability.
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