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

question 2

Multiple Choice

Suppose that two airlines are Cournot duopolists serving the Peoria-Dubuque route, and the demand curve for tickets per day is Q = 230 - 2p (so p = 115 - Q/2) .Total costs of running a flight on this route are 450 + 40q, 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)$800.
• B)$225.
• C)$230.
• D)$1,600.
• E)$3,250.

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Definitions:

Phase

A distinct period or stage in a process of change or forming part of something's development.

Male

Relating to the sex that in species with sexual reproduction is typically associated with XY chromosomes, producing sperm, and characterized by certain physical features.

Female

Refers to the sex that is typically associated with producing ova or eggs and has reproductive anatomy which includes structures such as ovaries and a uterus in mammals.

Parental Investment Theory

A theory in evolutionary biology and social science that explains parental expenditure on offspring, in terms of costs and benefits to the offspring's chances of survival.