Delta Air Oligopolle Analysis

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Article Commentary The article used for this commentary informs of an Airline that had to cancel nearly 700 flights due to technological issues. Delta Air’s technological problems were not only domestic but also international, this has affected consumers, producers, different airlines, the profit of Delta Air and also demand and supply. This caused a lack of supply in a highly demanded season. Demand is the quantity of a particular good demanded at a range of price, in a particular period of time. Supply is the quantity of output firm’s produce in a particular period of time and the various prices of the good. In this situation the Airline Delta Air failed to supply the quantity demanded due to technological issues, this can be represented…show more content…
In the new supply curve S2; the quantity supplied is Q2, the demand is still higher than the supply, which caused a shortage in the supply of flights of Delta Air. The lack of supply also affected the market for flights, due to Delta Air’s situation consumers substituted Delta Air with other airlines, this issue increased the demand of flights for other airlines therefore they increased their profit. The Airlines market is an oligopoly, this is a market structure characterized by a small number of large firms, which are relatively large to the overall size of the market causing substantial market control. As one of the firms in the oligopoly is unable to provide flights the demand in the market increases the other airlines may want to raise the price but as its an oligopoly they depend on each others actions, this explained with a kinked demand…show more content…
Also, the article says “Southwest Airlines cancelled more than 2,000 flights after a faulty router knocked out part of its systems” So Delta Air was not the first airline to suffer from technical problems, this type of situation affects the Market for Flights and it can also have an impact in the economy of many countries that are in an extend dependant of the income obtained by tourists due to the fact that this situation reduces consumer surplus which is the additional benefit enjoyed by consumers, this means that the demand of flights may reduce, especially considering that this event happened in a highly demanded season for

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