-In Exhibit L-5, the Most Reasonable Explanation for What Happens

Multiple Choice

-In Exhibit L-5, the most reasonable explanation for what happens to profit when both airlines choose a low price is that

A) average costs are lower
B) fewer people use airlines as a means of transportation
C) the firms are colluding
D) combined industry profit will be the lower than it would be under any other price combination
E) Southwest grabs a bigger share of the market