Suppose that two airlines are Cournotduopolists serving the Peoria-Dubuqueroute, and the demand curve for tickets perday is Q = 230 - 2p (so p = 115 - Q/2). Totalcosts of running a flight on this route are450 + 40q, where q is the number ofpassengers on the flight. Each flight has acapacity of 80 passengers. In Cournotequilibrium, each duopolist will run oneflight per day and will make a daily profit ofa) $3,250.b) $1,600.c) $225.d) $800.e) $230.

Given as, Demand = Q = 250-2p p = 115-Q/2 TC = Total cost = 450+40q Q = Q1+Q2

Suppose that two airlines are Cournot duopolists serving the Peoria-Dubuque route, and the demand curve for tickets day is Q = 230 - 2p (so p = 115 - Q/2). costs of running a flight on this route a 450 + 40q, where q is the number of passengers on the flight. Each flight ha. capacity of 80 passengers. In Cournot equilibrium, each duopolist will run one flight per day and will make a daily prof O a) $3,250. O b) $1,600.

Suppose that two airlines are Cournot duopolists serving the Peoria-Dubuque route, and the demand curve for tickets day is Q = 230 - 2p (so p = 115 - Q/2). costs of running a flight on this route a 450 + 40q, where q is the number of passengers on the flight. Each flight ha. capacity of 80 passengers. In Cournot equilibrium, each duopolist will run one flight per day and will make a daily prof O a) $3,250. O b) $1,600.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter12: Price And Output Determination: Oligopoly

Section: Chapter Questions

Problem 1E

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