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Now let's suppose XYZ Co. decides to join the Fly Buys scheme which entitles its customers to earn points towards free air travel. a. Discuss

Now let's suppose XYZ Co. decides to join the "Fly Buys" scheme which entitles its customers to earn points towards free air travel.

a. Discuss how the "Fly Buy" scheme will affect the firm's cost and revenue curves. Assume XYZ Co was initially in long-run equilibrium and that the scheme is successful.

b. If the "Fly Buy" scheme is successful at increasing XYZ's profit, do you expect these profits to be maintained over the long run? Why or why not?

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