Suppose the airline industry consists of only two airlines, Jumbo jet and Kenya airways. Let thetwo firms have identical costs C(Q) = 40Q, where i = 1,2. Assume that the demand curve forthe industry is given by P=100-Q d) What would be the Cournot-Nash equilibrium quantity if Kenya airways has a constantmarginal and average cost of 25 and Jumbo jet had constant marginal and average cost of40?

Oligopoly market structure is the market structure in which there are few large firms in the market.…

Answered: ) What would be the Cournot-Nash…

) What would be the Cournot-Nash equilibrium quantity if Kenya airways has a constant marginal and average cost of 25 and Jumbo jet had constant marginal and average cost of 40?

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

Suppose the airline industry consists of only two airlines, Jumbo jet and Kenya airways. Let the
two firms have identical costs C(Q) = 40Q, where i = 1,2. Assume that the demand curve for
the industry is given by P=100-Q

d) What would be the Cournot-Nash equilibrium quantity if Kenya airways has a constant
marginal and average cost of 25 and Jumbo jet had constant marginal and average cost of
40?

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