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Suppose That Two Cournot Duopolists Serve the Peoria-Dubuque Route, and the Demand

Question 1

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suppose that two Cournot duopolists serve the Peoria-Dubuque route, and the demand curve for tickets per day is Q = 190 - 2p (so p = 95 - Q/2) .Total costs of running a flight on this route are 1,050 + 20q, where q is the number of passengers on the flight.Each flight has a capacity of 80 passengers.In Cournot equilibrium, each duopolist will run one flight per day and will make a daily profit of


A) $525.
B) $190.
C) $200.
D) $400.
E) $2,250.

Correct Answer:

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