Figure 8.10
-In Figure 8.10, airline Fly Smart is initially a secure monopoly between two cities X and Y at point M, serving 300 passengers per day at the profit maximizing price of $300 per ticket. Suppose that Fly Smart discovers that a second airline is contemplating entering the market. If the minimum market entry quantity is zero passenger per day, what is Fly Smart's profit when it commits to the entry-deterring quantity?

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The Answer of  Figure 8.10
-In Figure 8.10, airline Fly Smart is initially a secure monopoly between two cities X and Y at point M, serving 300 passengers per day at the profit maximizing price of $300 per ticket. Suppose that Fly Smart discovers that a second airline is contemplating entering the market. If the minimum market entry quantity is zero passenger per day, what is Fly Smart's profit when it commits to the entry-deterring quantity?

Figure 8.10 -In Figure 8.10, Airline Fly Smart Is Initially a Secure