Question 1:

The Bertrand and Cournot theories of oligopoly differ on one assumption that leads to very different predictions. Explain the critical difference in assumptions and different predictions for price and quantity.

Question 2:

Explain how airlines use revenue management to maximize revenue.

Question 3:

Explain why direct network externalities favor expansion of a global network airline such as American Airlines or British Airways but negative externalities may limit expansion.

Question 4:

The US imposes a 25% tariff on Chinese manufactured goods. Many of the products sold by Wall*Mart are made in China. What effect will the tariff have on 1) the price of goods sold at Wall*Mart, 2) the quantity of goods sold, 3) employment at Wall*Mart, and 4) federal government revenues?Explain your answer.

Question 5:

Explain why international deregulation should lower airline costs and increase demand (supply and demand curves shift right).