Suppose the airline industry consisted of only two firms: American and Texas Air Corp. Let the two firms have identical cost functions, C(q) = 52q.Assume that the demand curve for the industry is given by P= 100-Q and that each firm expects the other to behave as a Coumot competitor.Calculate the Cournot-Nash equilibrium for each firm, assuming that each chooses the output level that maximizes its profits when taking its rival'soutput as given. What are the profits of each firm? (Round al quanties and dollar amounts to two decimal places.)When competing, each firm will produce 16 units of output.In turn, each firm will earn profit or $ 256 -What would be the equilibrium quantity if Texas Air had constant marginal and average costs of $10 and American had constant marginal andaverage costs of $52?If Texas Air had constant marginal and average costs of $10 and American had constant marginal and average costs of $52, American wouldproduce O units and Texas Air Corp. would produceO units.

The Marginal cost is the adjustment of the complete expense that emerges when the amount created is…

Suppose the airline industry consisted of only two firms: American and Texas Air Corp. Let the two firms have identical cost functions, C(q) - 52q. Assume that the demand curve for the industry is given by P = 100 - Q and that each firm expects the other to behave as a Cournot competitor. Calculate the Cournot-Nash equilibrlum for each firm, assuming that each chooses the output level that maximizes its profits when taking its rival's output as given. What are the profits of each firm? (Round all quantties and dollar amounts to two decimal places.) When competing, each firm will produce 16 units of output. In turn, each firm will earn profit of $ 256 . What would be the equilibrium quantity if Texas Air had constant marginal and average costs of $10 and American had constant marginal and average costs of $52? If Texas Air had constant marginal and average costs of $10 and American had constant marginal and average costs of $52, American would produce O units and Texas Air Corp. would produceO units.

Suppose the airline industry consisted of only two firms: American and Texas Air Corp. Let the two firms have identical cost functions, C(q) - 52q. Assume that the demand curve for the industry is given by P = 100 - Q and that each firm expects the other to behave as a Cournot competitor. Calculate the Cournot-Nash equilibrlum for each firm, assuming that each chooses the output level that maximizes its profits when taking its rival's output as given. What are the profits of each firm? (Round all quantties and dollar amounts to two decimal places.) When competing, each firm will produce 16 units of output. In turn, each firm will earn profit of $ 256 . What would be the equilibrium quantity if Texas Air had constant marginal and average costs of $10 and American had constant marginal and average costs of $52? If Texas Air had constant marginal and average costs of $10 and American had constant marginal and average costs of $52, American would produce O units and Texas Air Corp. would produceO units.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.3P

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