Q1. Refer to the following excerpt in the case: In the wake of these fare cuts, Northwest put out a statement deriding American's response. "American's action," a spokesperson for Northwest said, "is like nuclear warfare in response to a firecracker." American countered, "We were merely responding to Northwest. We have said over and over again that when other competitors undercut us, we will be competitive." (a) Elucidate the critical characteristics of the market structure for the U.S. airlines industry. (b) What has been done in the U.S. airlines industry to ensure price competitiveness among the major airline players? How could price signalling benefit this industry?