+1 862 207 3288 you are asked to comment on using economic analysis. You may submit no more than 2 pages. It must be typed, double spaced with 10-12 point font and 1 inch margins all around. If you want to use graphs to support your arguments they may be on additional pages, but should be drawn with a program like MSWORD or PowerPoint, and pasted in..
You may do either topic
Topic 2a
Market structure and competition in the airline industry.
The table below gives data on airline domestic market share for the years 2005 and 2015. In 2016, American acquired US Airways. Continental, NWA and American West were acquired by other airlines in that period. It was recently announced that Alaska is buying Virgin America. Using these data, comment on changing competition in the US domestic airline market. Use different ways of assessing market structure and competition, and discuss what the recent merger between US Airways and American, and the proposed merger of Alaska and Virgin America, will do to competition. For your information the Federal government considers an industry with an H over .18 very concentrated, and anything over .10 concentrated. If an industry is concentrated and a merger raises the H by .01 or more the government will likely challenge the merger.
Airline
2015 share
2005 share
Southwest
18.20%
11.50%
Delta
16.90%
11.80%
American
16.10%
15.70%
United
14.70%
12.10%
JetBlue
5.30%
2.60%
Alaska
4.50%
2.60%
US Airways
3.90%
4.70%
Spirit
2.60%
Virgin America
2.50%
SkyWest
2.40%
Frontier
1.90%
Other
12.00%
19.30%
continental
7.50%
nwa
7.00%
am west
3.90%
Topic 2b
In the aftermath of California and New York becoming the first states to raise the statewide minimum wage to $15, some small businesses with hourly workers are rethinking how they can absorb the increase. According to an article by Joyce Rosenburg, http://business.newsfactor.com/news/Small-Biz-Mulls-Minimum-Raise-Hike/story.xhtml?story_id=033003RY6LAU#, one restaurant may have owners pick up food at a counter instead of delivering it to tables. It may also have workers do more tasks, for example, a cashier doing some administration. Rosenberg notes some businesses are cutting staff, others are raising prices. Meanwhile a pizza chain in Washington DC is giving raises without riasing prices because of solid revenue growth. A smoothie business in NYC suburbs has raised prices 30%, as has a seafood restaurant chain in Seattle. It is also a fact that a manufacturing firm in Seattle is replacing some labor with technology. Using production and cost theory, and profit maximization rules, contrast and discuss these different reactions, and perhaps discuss how the different responses gives us some insights about how much market power the different businesses have.
