Wednesday, October 22, 2008

Which prices are flexible and which are sticky?

Apparently OPEC producers are struggling because the price of oil has dropped precipitously. Shockingly enough, the economic downturn has lowered demand!

The airlines started to charge for baggage in mind June. According to this graph, the price of gas at the pump then was over $4/gallon. Now it's back down to about $2.70/gallon, what it was a year ago. Will the airlines get rid of their charge for baggage? And, if so, how long will that take.

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