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What would the market price of an airline ticket be

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Two airline companies with identical cost functions are competing in the market for air travel by investing in airline capacity (airline seats). Let q 1 represent Airline 1's capacity choice and let q 2 represent Airline 2's capacity choice. Airline 1's reaction function is given below: q 1 = 30 - 1 2 q 2 . Airline 2's reaction function is the same with the labels reversed, i.e. q 2 = 30 - 1 2 q 1 The market demand for Airlines is Q = 100 - p , where Q = q 1 + q 2 is the total quantity of airline seat tickets sold and p is the price of an airline ticket. Suppose Airline 2 had to shut down, so that Airline 1 had a monopoly in the market, what would the market price of an airline ticket be?

Reference no: EM133252144

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