CAT 1999 Question Paper Question 61

Question 61

Three airlines - IA, JA and SA - operate on the Delhi-Mumbai route. To increase the number of seats sold, SA reduced its fares and this was emulated by IA and JA immediately. The general belief was that the volume of air travel between Delhi and Mumbai would increase as a result. Which of the following, if true, would add credence to the general belief?


The stated conclusion is that volume of air travel will increase if the airfare drops. The underlying assumption is that the travellers decide whether or not to fly based on the cost of the ticket. Option C bolsters the assumption and hence supports the conclusion.

Option D weakens the argument as if travellers are not paying for their ticket, they will not be price-sensitive. The extension of the scheme to other routes or airline profitability does not necessarily reflect on how the scheme is doing over the given route.

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