In 2018, Delta Air Lines said that it was increasing its fares by 4% because its fuel bill jumped by 33% from the previous yoar. Other airines also announced fareincreases. Assuming that these firms are oligopolistic and the outcome is a Nash-Coumot equilibrium, why did the prices rise less than in proportion to the firms' cost?Price rose less than the firms' costs in this oligopoly becauseO A. demand is not perfectly inelastic.O B. consumers are not price sensitive.OC. the firms are price takers.D. air travel has no close substitutes.

An oligopoly is a market structure in which a small number of enterprises have a significant amount…

he outcome is a Nash-Coumot equilibrium, why di rose less than the firma' costs in this oligopoly because A demand is not perfectly inelastic. . consumers are not price sensitive. . the firms are price takers. air travel has no close substitutes.

he outcome is a Nash-Coumot equilibrium, why di rose less than the firma' costs in this oligopoly because A demand is not perfectly inelastic. . consumers are not price sensitive. . the firms are price takers. air travel has no close substitutes.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.8P

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