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Air Canada and KLM compete for customers on flights among Amsterdam and Toronto. The total number of passengers (Q) flown by these two firms is the sum of passengers who fly KLM, Qk and those who fly Air Canada, Qc. Suppose that no other companies can enter the route Due to they cannot obtain landing rights at both airports. Market demand is given by:
where p is the cost of a one-way flight (in Euros), and Q is claculated in thousands of passengers flying one-way per quarter. Every airline has a constant marginal and average cost of €147 per passenger per flight.
a) Determine the Cournot equilibrium.
b) Assume both airlines receive a subsidy of €54 per passenger. Derive the new Cournot equilibrium. What is the effect of the subsidy? How much of the subsidy is passed on to the passengers?
Q.2. On the basis of the analysis of the case above, what is your opinion about legalizing marijuana in Canada ?mum 100 words accepted#
Hi Could you please help me with " Ramsey pricing in detail " as I have an assignment.
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Plot the demand schedule and draw the demand curve for the data given for Marijuana in the caseabove.
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