A) Assuming that there are only 2 airline companies in the U.S. flying between Newark and Miami,
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Question:
A) Assuming that there are only 2 airline companies in the U.S. flying between Newark and Miami, Delta and Continental, what is the ((Nash) Equilibrium) or price that each company in the following matrix will charge? At that price, what are the profits for each company? Note that the first number listed in bold is the profit for Delta and the second number listed that is in italics is the profit for Continental.
B) Can Delta and Continental Collude to increase their profits? Why or why not?
Continental | ||||
299 | 399 | 499 | ||
Delta | 299 | 13000 22000 | 16000 19000 | 20000 16000 |
399 | 12000 18000 | 15000 15000 | 18000 13000 | |
499 | 9000 14000 | 13000 12000 | 16000 10000 |
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Managerial Accounting A Focus on Ethical Decision Making
ISBN: 978-0324663853
5th edition
Authors: Steve Jackson, Roby Sawyers, Greg Jenkins
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