Figure 6.5 Japanese Market for Jetliners

question 52

Multiple Choice

Figure 6.5 Japanese Market for Jetliners
-Consider the Japanese market for jetliners as depicted in Figure 6.5.Suppose the lone producer of jetliners in the world is Boeing, which faces a constant marginal cost of $20 million per jetliner, but now a European manufacturer, Airbus, begins production.Airbus faces the same marginal cost as Boeing, but the European government provides Airbus with a subsidy of $8 million per jetliner produced.As a result of the competition, Boeing leaves the Japanese market, leaving Airbus as a monopoly.How many jetliners will Airbus produce and what price will they sell them for?

• A) 23, $30 million
• B) 32, $26 million
• C) 23, $26 million
• D) 32, $30 million

---

Definitions:

Lithium Carbonate

A chemical compound used primarily in the treatment of bipolar disorder, acting to stabilize mood and reduce the extremes of mania and depression.

Bipolar Disorder

A mental disorder marked by extreme mood swings, including emotional highs (mania or hypomania) and lows (depression).

Lithium Carbonate

A chemical compound used primarily in the treatment of bipolar disorder, acting to stabilize mood.

Obsessive-Compulsive Disorder

A mental disorder characterized by unwanted thoughts (obsessions) and repetitive behaviors (compulsions) that the sufferer feels driven to perform.