In Problem 6, suppose that two Cournot duopolists serve the Peoria-Dubuque route, and the demand curve for tickets per day is Q = 250 - 2p (so p = 125 - ). Total costs of running a flight on this route are 2,050 + 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) $1,025.
B) $400.
C) $250.
D) $800.
E) $3,850.

Question

In Problem 6, suppose that two Cournot duopolists serve the Peoria-Dubuque route, and the demand curve for tickets per day is Q = 250 - 2p (so p = 125 -  ). Total costs of running a flight on this route are 2,050 + 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) $1,025. 
B) $400. 
C) $250. 
D) $800. 
E) $3,850.

Quizplus · Accepted Answer

The Answer is B

In Problem 6, Suppose That Two Cournot Duopolists Serve the Peoria-Dubuque