#cfa-level-1 #microeconomics #oligopoly #reading-16-the-firm-and-market-structures #section-2-analysis-of-mkt-structures #study-session-4
Consider the pricing behavior of commercial airline companies. Pricing strategies and route scheduling are based on the expected reaction of the other carriers in similar markets. For any given route only a few carriers are in competition. If one of the carriers changes its pricing package, others will likely retaliate. Understanding the market structure of oligopoly markets can help in identifying a logical pattern of strategic price changes for the competing firms.