11- Airbus and Boeing com

11- Airbus and Boeing com

11- Airbus and Boeing compete in the market for big airplanes. Suppose each produce only one type of airplane and the airplanes are identical. The market demand for airplanes is as following_P= 200 ? QA ? QBwhere 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.Assume that firms decide simultaneously how much to produce.What is Boeing?s reaction function?

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