Suppose the arline industry consisted of only two firms American and Texas Air Corp Let the two fiems have identical cost functions, C 40g Assume that the demand curve for the industry is given by P190-Q and that each firm expects the other to behave as a Cournot compeotor Calculate the Coumot-Nash equilibrium for each firm, assuming that each chooses the output level that maximizes as profes when taking its rival's output as given. What are the profits of each fem? (Round all quantities and dollar amounts to hwo decimal places) When competing, each firm will produce units of output In tum, each firm will earn profit of S What would be the equilibrium quartity if Texas Air had constant marginal and average costs of $10 and American had contart marginal and average costs of 5407
Suppose the arline industry consisted of only two firms American and Texas Air Corp Let the two fiems have identical cost functions, C 40g Assume that the demand curve for the industry is given by P190-Q and that each firm expects the other to behave as a Cournot compeotor Calculate the Coumot-Nash equilibrium for each firm, assuming that each chooses the output level that maximizes as profes when taking its rival's output as given. What are the profits of each fem? (Round all quantities and dollar amounts to hwo decimal places) When competing, each firm will produce units of output In tum, each firm will earn profit of S What would be the equilibrium quartity if Texas Air had constant marginal and average costs of $10 and American had contart marginal and average costs of 5407
Chapter15: Imperfect Competition
Section: Chapter Questions
Problem 15.3P
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