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Re: As a result of recent mergers, three airlines now carry over 90 percen [#permalink]
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As a result of recent mergers, three airlines now carry over 90 percent of one country's domestic traffic. Because prices are almost always higher in a marketplace where a few companies can choose to reduce greatly the total supply of goods or services than in a marketplace with many competitors, air ticket prices soon will rise.

Which of the following statements, if true, would most seriously weaken the conclusion drawn above?

A. Many airlines confirm more reservations, when possible, than there are seats available for any given flight.
-irrelevant

B. Inflation in energy prices will cut into the profits of all major airlines if air ticket prices do not rise soon.
- strengthens the conclusion ,so ,wrong

C. The number of flights departing from certain airports has been reduced in order to alleviate overcrowding.
-irrelevant

D. Further mergers could occur among the smaller airlines that still control almost 10 percent of domestic traffic.
-irrelevant

E. All the major airlines have gone into debt to buy large fleets of new airplanes, which they must fly as often and as nearly fully loaded as possible in order to avoid bankruptcy.
-only option left after elimination of others.Also gives the reason as flights must be conducted often and fully loaded,so increasing price will have adverse effect.so this is the right answer
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Re: As a result of recent mergers, three airlines now carry over 90 percen [#permalink]
But as they have 90% of marketplace does it matter that really???


90% marketplace =====>>Monopoly====>Even if they raise the amount , it should not matter and they should gain profits ===> Even if the flights are not fully occupied they have increased the flights fare and thus the customer has to buy their tickets because of monopoly

I don't think this answer gives me proper clarification
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Re: As a result of recent mergers, three airlines now carry over 90 percen [#permalink]
VBudhew wrote:
But as they have 90% of marketplace does it matter that really???


90% marketplace =====>>Monopoly====>Even if they raise the amount , it should not matter and they should gain profits ===> Even if the flights are not fully occupied they have increased the flights fare and thus the customer has to buy their tickets because of monopoly

I don't think this answer gives me proper clarification



Which of the following statements, if true, would most seriously weaken the conclusion drawn above?

E. All the major airlines have gone into debt to buy large fleets of new airplanes, which they must fly as often and as nearly fully loaded as possible in order to avoid bankruptcy.

As per true statement E, it means they can only assure full flights if they keep the prices same as before. If prices are increased, it is possible that they may not be fully loaded.

Secondly, Other options are not even as close as option E. Other option indicates prices would increase due to decrease in demand or other factors.
So among given choices, E is best option:)
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Re: As a result of recent mergers, three airlines now carry over 90 percen [#permalink]
Hello from the GMAT Club VerbalBot!

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Re: As a result of recent mergers, three airlines now carry over 90 percen [#permalink]
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