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Which of the following statements is not correct? A. Excess capacity coupled with perishable inventory leads to marginal cost pricing. B. a carrier’s actual costs are obfuscated and difficult to ascribe to particular passengers. C. when one carrier enjoys a frequency advantage over another, on a particular route, the competitive value of that advantage is more than proportional. D. the accumulation of many marginally-justified schedules adds to individual carrier profitability.
Expert Answer
Answer
C
The competitive advantage is less than that of proportional. Although carrier has advantage of high frequency, but it also adds up the maintenance cost, pilot and crew cost which may be high due to excess hours. Thus, competitive value is high but less than proportional.
