StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

MICROECONOMICS presentation - Essay Example

Cite this document
Summary
Game Theory: Australian Airline Industry “Flights operated by the Ansett Australia Group ceased from midnight on Monday 4 March, 2002.” (Ansett 2011). This piece of information may be hard to digest when one considers that the airline in question operated for more than 66 years and even dominated the Australian skies for a substantial period of time…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.5% of users find it useful
MICROECONOMICS presentation
Read Text Preview

Extract of sample "MICROECONOMICS presentation"

Download file to see previous pages

Barriers to Entry. The airline industry operates in a highly dynamic environment and is affected not only by the legal, technological and economic environment but also by the global environment. Government restrictions and high degree of competition act as entry barriers in the airline industry. However the biggest entry barrier is the gargantuan cost involved in setting up and running the business. The acquisition of aircrafts, implementation of adequate security measures, deployment of skilled manpower and rendering the desired level of customer service entail huge financial resources.

The high cost of entry however does not deter organizations with sound business models and adequate financial resources to enter the business. The Australian domestic airline industry, after its deregulation in 1990, has seen the entry of many players each catering to different customer segments. There have been firms that have flourished (Virgin Australian Airlines) and there have been firms that have perished (Ansett Australia). Competitive strategies. In addition to the general business environment, companies are also affected by the competitive strategies adopted by rival firms. . An example of the differentiation could be an airline (Qantas) which provides ‘bells and whistles’ in its service and charges a high price.

Likewise, there could be another airline (Tiger Airways) with a ‘no frills’ service. It is important to note here that these two airlines are targeting distinct customer segments. As such, the high price charged by the airline offering value added services (e.g. in-flight entertainment, free wine) in addition to the core service of transportation does not induce the other airline, which offers ‘trimmed down’ services, to increase the price. Game Theory. There may be instances where more than one firm is competing for the same target market; for e.g. two airlines (Jetstar and Tiger Airways) trying to capture the price-sensitive customer.

The competitive strategies employed by one firm and reactions thereof by the other firm are best understood with the help of the game theory. In the world of business game theory finds applications in research and development expenditure, pricing, new product introduction, strikes, negotiations etc. A manager’s decision in each of these settings depends on the decisions that other players in the industry will take. As such, the payoffs in these setting can said to be interdependent. In the discussion about the airline industry, one may fathom three different outcomes; co-operative game, non co-operative game and a situation of no interdependence.

The airline may get together and form a cartel (cooperative game) and operate as if they were a monopoly. In such a case the dominant strategy of each firm would be high price and neither would be compelled to reduce the price because of the implicit co-operation. This is the most logical game when the industry

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“MICROECONOMICS presentation Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
MICROECONOMICS presentation Essay Example | Topics and Well Written Essays - 750 words. Retrieved from https://studentshare.org/macro-microeconomics/1431663-microeconomics-presentation
(MICROECONOMICS Presentation Essay Example | Topics and Well Written Essays - 750 Words)
MICROECONOMICS Presentation Essay Example | Topics and Well Written Essays - 750 Words. https://studentshare.org/macro-microeconomics/1431663-microeconomics-presentation.
“MICROECONOMICS Presentation Essay Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/macro-microeconomics/1431663-microeconomics-presentation.
  • Cited: 0 times

CHECK THESE SAMPLES OF MICROECONOMICS presentation

Twenty-Year Veterans and Federal Employment

Methods presentation: Structural Equation Modeling (S.... .... .... in Management Research: Twenty-Year Veterans and Federal Employment Name: Institution: Summary of the Analysis The results of the analysis of data from the Federal Bureau of Statistics shows the significant variables that represent the five groups of veterans employed by the US government in the period of study....
3 Pages (750 words) Speech or Presentation

Principles of Macroeconomics

For example, the point labeled X is unachievable in the current scenario. c) A society can only achieve the point unless there is… This will shift the curve rightwards indicating that the economy could now produce more of both corns and trucks. d) Y is the inefficient point because it is inside Any point inside the curve is inefficient because more of trucks could be produced with out sacrificing the production of corns or reducing the quantity of corn...
4 Pages (1000 words) Speech or Presentation

Principles of MicroEconomics

Demand for batter depends on the price of butter itself, price of its substitutes, price of complimentary goods and income.... Therefore demand function for butter can be portrayed in notation form as: If all the factors are held constant increase in price of margarine which is… Therefore the demand curve will shift from D0 to D1....
2 Pages (500 words) Speech or Presentation

Critical Thinking 2

This is because, agricultural products have the same demand regardless of the price present within the market this is because they are necessities.... After a good… This means increased supply of the commodity will significantly reduce the price of the commodity, in-turn reducing the farmer's income....
4 Pages (1000 words) Speech or Presentation

Macroeconomics Problem Set

If real income is higher and money supply increases the rate of inflation would be lower since to get inflation we subtract real income growth from the growth in the money supply.... It is, therefore, evident that a higher money supply in order to support an increase in real… K is a constant; it shows the amount of money that individuals are willing to hold for every dollar of income....
5 Pages (1250 words) Speech or Presentation

Macroeconomics Theory

The aggregate demand (AD) will lead to an increase in the country's output after the change in the U.... government spending drives an increase in the creation of jobs and innovations.... Holding to the changes made by the government, the AS curve will shift upwards from the left… Therefore, there will be a shift in the AD from AD1 to AD2 in slanting straight lines. ii) The inflation shock will affect the per capita because of the subsequent increase in income; thus, there will be a shift in the level of demand for products....
2 Pages (500 words) Speech or Presentation

Ecology - presentation ( Video Share - Adaptation)

Hornbill are beautiful birds which mind you are generally familiar to farmers in a forest.... There are different species of the Hornbill which exist on the surface of the… with some traced to India, Andamans among other regions on the planet.... he Great Hornbill is a beautiful bird which has an estimated length of three and half a feet....
4 Pages (1000 words) PowerPoint Presentation

Country Branding

In today's world, country branding is no longer a choice but a necessity for prestige, wealth, regional and international power, and to competitive advantage.... A strong brand not only strengthens its… In the past few decades, branding was a marketing tool for business and organization; countries have currently joined in order to promote the country brands....
1 Pages (250 words) Speech or Presentation
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us