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Essay Details:
Essay text:
We have considered the elasticity of the market to be 1.15.
In order to achieve these objectives, Southwest has the following alternatives to choose from in order to respond effectively:
?Maintain the current fare.
?Follow United by increasing the fare by $10.
?Follow United but increase fare by only $5.
After analyzing the alternatives, we conclude that it will be appropriate for Southwest to increase its fare by $5 so as to increase its daily operating profits while maintaining the low fare airline image.
Problem Definition and Statement of Alternatives
Problem definition: The problem in this case for Southwest Airlines is to workout a strategy to respond to the unexpected developments and changes made by the United Airlines in their services and pricing...
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