Question I: Lucky Air was founded as a low-cost airline. Describe the 2 opportunities Lucky Air had to give up to focus on the lowest cost in the case study?
(Hint: Look at the section, "Betting on Growth" in the case study)
Question II: Pick one of the opportunities you think is the best option. What is the opportunity cost of your selection?
Question III: In the case study, it states, "passengers in China increased to 387 million, a 16.8% jump from a year before." What will happen to price if the supply of air travel stays the same? Why?
Question IV: Based on the increase in demand, how did the airline industry in China respond?
Question V: What affect did this response have on price?
Question VI: Which of the four market structure does Lucky Air operate in? Why?
*Options for the Market Structure:
i. Monopoly
ii. Perfect competition
iii. Monopolistic competition
iv. Oligopoly
Question VII: Based on Lucky Air's market structure and the supply-and-demand environment for air travel in China, explain why Lucky Airlines should focus on the opportunity you chose in question II.