It is currently 19 Sep 2017, 05:02

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# CR Airline routes

Author Message
Director
Joined: 10 Oct 2005
Posts: 525

Kudos [?]: 68 [0], given: 0

Location: US

### Show Tags

05 Oct 2006, 05:12
00:00

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions

### HideShow timer Statistics

Attachments

4 CR 1.JPG [ 109.11 KiB | Viewed 1004 times ]

Kudos [?]: 68 [0], given: 0

VP
Joined: 21 Aug 2006
Posts: 1013

Kudos [?]: 38 [0], given: 0

### Show Tags

05 Oct 2006, 05:28

As the existing airlines are likely to undercut the prices, new entrants will not be so willing to enter the segment.
_________________

The path is long, but self-surrender makes it short;
the way is difficult, but perfect trust makes it easy.

Kudos [?]: 38 [0], given: 0

Senior Manager
Joined: 13 Sep 2006
Posts: 279

Kudos [?]: 22 [0], given: 0

Location: New York

### Show Tags

05 Oct 2006, 06:38
One more for B.

Author of the passage assumes the airlines will increase fees while in fact they may just keep them low when new competitors enter the market.

Kudos [?]: 22 [0], given: 0

SVP
Joined: 24 Sep 2005
Posts: 1884

Kudos [?]: 357 [0], given: 0

### Show Tags

05 Oct 2006, 06:45
What makes cutting price not a successful strategy in long run, as pointed out in the passage, is the possibility that competitors would make use of that strategy while the winner have to rise the fare. B weakens this by pointing out that new competitors predict the winner may employ the strategy again ----> that is to say, new competitors probably dare not to make use of the strategy.

B stands.

Kudos [?]: 357 [0], given: 0

Director
Joined: 17 Jul 2006
Posts: 702

Kudos [?]: 13 [0], given: 0

### Show Tags

05 Oct 2006, 07:10

Kudos [?]: 13 [0], given: 0

Senior Manager
Joined: 11 Jul 2006
Posts: 378

Kudos [?]: 15 [0], given: 0

Location: TX

### Show Tags

05 Oct 2006, 07:26
Another one for B.

Kudos [?]: 15 [0], given: 0

Current Student
Joined: 29 Jan 2005
Posts: 5210

Kudos [?]: 431 [0], given: 0

### Show Tags

05 Oct 2006, 07:28
This is just a never ending price war cycle in the airline industry. Once they drive away competitors, airlines jack up their fares until a new competitor enters the market, at which point they slash their prices again. The airline that can keep operating with the lowest fares for the longest period of time (even at a loss) will eventually prevail.

Kudos [?]: 431 [0], given: 0

05 Oct 2006, 07:28
Similar topics Replies Last post
Similar
Topics:
It would not be surprising to discover that the trade routes 1 14 Nov 2011, 15:02
#Top150 CR: Major airlines will purchase many of the new aircrafts 0 28 Mar 2017, 12:06
GMAT PREP CR: Airliner 7 28 Aug 2009, 13:01
5 Some airlines allegedly reduce fares on certain routes 7 24 Nov 2016, 04:12
Some airlines allegedly reduce fares on certain routes to a 4 26 Apr 2008, 07:17
Display posts from previous: Sort by