Qantas Scarcity Essay

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Question 10: 1. Does this news clip deal with scarcity? Explain. (1 point) According to basic economics principles, scarcity refers to the problem that it has only a limited amount of economic resources such as labours, natural resources and machines and therefore can produce only a limited amount of goods and services to serve unlimited human’s wants and needs. Thus, firms have to cope with the issue that producing more of one good or service means producing less of another good and service. In this situation, Qantas has shown they never deal with scarcity because of several evidence below. First of all, Qantas has a good base that make it become the dominant in the domestic market. Secondly, they removed 5000 jobs which mean that they used to have more than enough labours to complete acquired tasks (avoid diminishing return). Lastly, Qantas is about to reduce the number of airplane from 11 to 7 in the future, which mean that the number of machines they own at the moment is more than what they need. In conclusion,…show more content…
In the domestic market, Qantas has two big competitors, which are Tiger Airways and Virgin Australia, however, Qantas is still the dominant in this market with 65% of the market share and more than 80% of the corporate market while in the international market Qantas does not have as much advantages as their competitors and the competition in this market is very intensive. Hence, Qantas decided to make a trade off that focusing more on domestic market as they think that is the core of ensuring its viability. What they did was they plan to remove some Boeing 747s – the workhorse of international network to cut cost despite the opportunity that baby boomers are spending a lots on overseas travelling. They also cut off 5000 jobs and 2 billions cost to revive its fortunes which can give them a chance to make a competitive

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