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Jun 8, 2008 | 7:16 pm

#22

troyintn

Join Date: Nov 2004

Location: Nashville

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Posts: 6,315

Quote:

Originally Posted by humanoid94

Airlines if facing elastic demand curve, reduce supply= increase price, demand falls by more than increase in price=> airlines die.

More info:

http://en.wikipedia.org/wiki/Price_elasticity_of_demand

The issue is the airlines only controll there schedule. They do not controll the industy. LCCs will take routes and increase schedules, so there really is no elastic demand curve.