Why the market equilibrium might involve a low price

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Reference no: EM131210994

The world market for large passenger jet airplanes is an oligopoly dominated by two firms: Boeing in the United States and Airbus in Europe.

a. Explain why the market equilibrium might involve either a low price for airplanes or a high price for airplanes

b. From the perspective of the well-being of the United States (or Europe), why might a high-price equilibrium be desirable?

c. What price outcome is desirable for Japan or Brazil? Why?

d. If the outcome is the high-price equilibrium, does Japan or Brazil still gain from importing airplanes? Explain.

Reference no: EM131210994

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