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41 Consider a model in which the normal equilibrium has the property so that production occurs at the minimum average cost, such as models of Bertrand competition or contestable markets. There will typically be excess demand at a price equal to minimum average cost. A question then arises as to how those customers who do not receive service at the market price should be treated. Most of these customers will be prepared to pay a little more than the market price for service, thus providing an opportunity for profitable entry by a new entrant who offers supply at more than the market price to these customers and the same price to other existing customers.

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Bailey, E. , Graham, D. , & Kaplan, D. P. (1985). Deregulating the Airlines. Cambridge, MA: MIT Press. Bailey, E. , & Williams, J. R. (1989). Sources of economic rent in the deregulated airline industry. Journal of Law and Economics, 31, 173–202. Baker, S. , & Pratt, J. B. (1989). Experience as a barrier to contestability in the airline markets. The Review of Economics and Statistics, 71, 352–356. , Bauer, P. , & Zlatoper, T. R. (1998). US air passenger service: A taxonomy of route networks, hub locations, and competition.

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10 Lies About The Atkins Diet by Tom Venuto


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