RyanAir and EasyJet both fly between London and Marrakech. Their demand curves for EasyJet and RyanAir are

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RyanAir and EasyJet both fly between London and Marrakech. Their demand curves for EasyJet and RyanAir are given, respectively, by Q_E = 500 – 2P_{E +}P_{R_}and Q_R = 500 _– 2P_{R +} P_E. Q_E and Q_R stand for the number of passengers per day for EasyJet and RyanAir, respectively. The marginal cost of each carrier is £10 per passenger.

If EasyJet sets a price of £100, what is the equation of RyanAir’s demand curve and marginal revenue curve? What is RyanAir’s profit-maximizing price when Easyjet sets a price of £100?
Derive the equations for EasyJet’s and RyanAir’s price reaction curves.
What is the Bertrand equilibrium in this market?

Posted Date: Dec 01, 2021 03:53 AM

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RyanAir and EasyJet both fly between London and Marrakech. Their demand curves for EasyJet and RyanAir are

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