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a.You are managing an airline firm operating in the aviation industry. The industry elasticity of demand for airline travel is -6, and the value of

a.You are managing an airline firm operating in the aviation industry. The industry elasticity of demand for airline travel is -6, and the value of Rothschild index O.75. Calculate the elasticity of demand for the firm you are managing. Should you support the proposal brought out by the aviation industry to increase the price of air tickets or not and why?

b. The graph given below shows the kinked demand curve under oligopoly. Explain why there is a kink in the demand curve?

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