Sample Solution from
Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
9th Edition
ISBN: 9781259290619
Chapter 1
Problem 1CACQ
Try another sample solutionarrow_forward
To determine

To find:

The type of rivalry that exists.

Explanation of Solution

It is an example of producer-producer rivalry. In an airline industry, there are various operators who attract customers by price and non-price competitions. Customers usually travel in those airlines which either give big discounts or are cheaper than others.

For example, when an airline gives an offer to its customer to carry two bags without extra charge, it is considered as a non-price competition strategy. Customers get attracted towards such an airline and save on their flying cost. Since this offer is aimed at wooing the customers away from the competitors, it is an example of producer-producer rivalry.

Concept Introduction

Producer rivalry:

Producer rivalry is a completion faced by suppliers when there are many producers competing for limited number of customers.

Not sold yet?Try another sample solutionarrow_forward