NorthAir charges low fares for its economy class seats, but it provides very cramped seating and few amenities. Market research shows that economy passengers would willingly pay more for wider seating and better service, and additional revenue provided by these higher ticket prices would more than cover the additional cost of providing these amenities. Even though NorthAir is searching for ways to improve its profitability, it has decided not to make these
improvements.
Which of the following, if true, would most help to explain NorthAir ' s decision in light of its objectives?
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ANone of NorthAir' s competitors offers significantly better seating and service to economy-class passengers than NorthAir does.
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BOn many of the routes that NorthAir flies, it is the only airline to offer direct flights.
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CA few of NorthAir' s economy-class passengers are satisfied with the service they receive, given the low price they pay.
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DVery few people avoid flying on NorthAir because of the cramped seating and poor service offered in economy class.
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EThe number of people who would be willing to pay the high fares NorthAir charges for its business-class seats would decrease if its economy-class seating were more acceptable.
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