Suppose That Two Airlines Are Cournot Duopolists Serving the Peoria-Dubuque

question 37

Multiple Choice

Suppose that two airlines are Cournot duopolists serving the Peoria-Dubuque route, and the demand curve for tickets per day is Q = 220 - 2p (so p = 110 - ) . Total costs of running a flight on this route are 1,400 + 20q, where q is the number of passengers on the flight. Each flight has a capacity of 80 passengers. In Cournot equilibrium, each duopolist will run one flight per day and will make a daily profit of

• A) $400.
• B) $800.
• C) $220.
• D) $700.
• E) $3,000.

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Definitions:

PET

Positron Emission Tomography, a nuclear medicine functional imaging technique used to observe metabolic processes in the body as an aid to the diagnosis of diseases.

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The physiological capacities and activities related to the movement of body parts controlled by the nervous system.

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The cognitive process of identifying and acknowledging the presence of something previously seen, heard, or experienced.

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The process of interpreting written symbols and comprehending them as words or sentences.