-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,what will happen if the government offers a $30 subsidy to airlines that serve this route?
Definitions:
Perfect Competitor
A theoretical firm in a perfectly competitive market where no single buyer or seller has the market power to influence prices.
Long Run
The long run is a period in which all factors of production and costs are variable, allowing for complete adjustment to changes.
Short Run
A period of time during which at least one of a firm's inputs is fixed, limiting its ability to adjust to changes in market demand or supply.
Many Firms
A situation in a market where numerous firms compete against each other to sell their products or services.
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