Question

Two airlines serve the route between Tampa and Houston. What will happen to one airline if the other one raises its​ prices? A. There will be a movement​ downward, to the​ right, along its initial demand curve. B. There will be a movement​ upward, to the​ left, along its initial demand curve. C. Its demand curve will shift to the left. D. Its demand curve will shift to the right

Answer 1

Answer:

D. Its demand curve will shift to the right

Explanation:

If two airlines are competing for the same market, and airline A raises its price, the airline B will benefit because now it will be cheaper compared to the other one.

This means that more people will be willing to purchase tickets from airline B at any given price (in this case, the same price as before), shifting the demand curve of airline B to the right.