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QUESTION

South Charlerio Airport is a regional airport serving the leisure travel market. The inverse demand curve for this airport is P= 150 - Q.

South Charlerio Airport is a regional airport serving the leisure travel market. The inverse demand curve for this airport is P= 150 - Q. Assume there are onlt tow airlines serving this airport, each with the identical marginal cost (MC) of $30.

A) supposing they perform as Cournot oligopolists, determine the price and total firm productivity.

B) Compare this with the result under pure monopoly and perfect competition .

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