Question: In 2012 Southwest Airlines reported that its cost per available
In 2012, Southwest Airlines reported that its “cost per available seat mile” was 13.0¢ compared to 13.8¢ for United Airlines. Assuming that Southwest and United compete on a single route, use a graph to show that their equilibrium quantities differ.
Relevant QuestionsIn a homogeneous-good Cournot model where each of the n firms has a constant marginal cost m and the market demand curve is p = a – bQ, show that the Nash-Cournot equilibrium output of a typical firm is q = a – m / (n + ...To examine the trade- off between efficiency and market power from a merger, consider a market with two firms that sell identical products. Firm 1 has a constant marginal cost of 1, and Firm 2 has a constant marginal cost of ...Suppose that identical duopoly firms have constant marginal costs of $ 10 per unit. Firm 1 faces a demand function of q1 = 100 - 2p1 + p2, where q1 is Firm 1’ s output, p1 is Firm 1’ s price, and p2 is Firm 2’ s price. ...Two firms compete by advertising. Given the payoff matrix to this advertising game, identify each firm’s best response to its rival’s possible actions. Does either firm have a dominant strategy? What is the ...Takashi Hashiyama, president of the Japanese electronics firm Maspro Denkoh Corporation, was torn between having Christie’s or Sotheby’s auction the company’s $ 20 million art collection, which included a van Gogh, a ...
Post your question