GMAT Critical Reasoning
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Source: PREP
Level: 3
Some airlines allegedly reduce fares on certain routes to a level at which they lose money, in order to drive competitors off those routes. However, this method of eliminating competition cannot be profitable in the long run. Once an airline successfully implements this method, any attempt to recoup the earlier losses by charging high fares on that route for an extended period would only provide competitors with a better opportunity to undercut the airline's fares.
Which of the following, if true, most seriously weakens the argument?
- A In some countries it is not illegal for a company to drive away competitors by selling a product below cost.
- B Airline executives generally believe that a company that once underpriced its fares to drive away competitors is very likely to do so again if new competitors emerge.
- C As part of promotions designed to attract new customers, airlines sometimes reduce their ticket prices to below an economically sustainable level.
- D On deciding to stop serving particular routes, most airlines shift resources to other routes rather than reduce the size of their operations.
- E When airlines dramatically reduce their fares on a particular route, the total number of air passengers on that route increases greatly.