As a result of the restrictions on travel, the Airline Industry is in financial distress. Use the data below to answer questions Firm % of…

As a result of the restrictions on travel, the Airline Industry is in financial distress. Use the data below to answer questions

Firm % of MarketAmerican 17.6%Delta 17.5%Southwest 16.9%United 14.9%Alaskan 6.4%JetBlue 5.5%Spirit 4.2%Frontier 3.1%SkyWest 2.9%Hawaiian 1.6%

Explain why this industry is considered an oligopoly using the characteristics of the industry, the 4-firm

concentration ratio and the current Herfindahl-Hirshman Index.

Extra Credit: What if (hypothetically) United needed to merge with another airline in order to stay in

business. Would the government be more likely to approve a merger with SouthWest or with Spirit? Use

the post merger HHI’s to justify your answer.

https://www.statista.com/statistics/250577/domestic-market-share-of-leading-us-airlines/

Sample Solution
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