Airbus and boeing compete in the market for big airplanes, Ask an Expert

Economics

Airbus and Boeing compete in the market for big airplanes. Presume each produce only one type of airplane and the airplanes are identical. The market demand for airplanes is as following:

P= 200 – QA – QB

Where QA is how many airplanes Airbus produces and QB is how many Boeing makes. Each firm has a constant marginal cost for each airplane of $80. The fixed costs for both firms are equal to $200.

Suppose Boeing decides first how much to produce and Airbus follows.

What will be Boeing’s profit if it decides first?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M91226460

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