Suppose That Two Cournot Duopolists Serve the Peoria-Dubuque Route, and the Demand

suppose that two Cournot duopolists serve the Peoria-Dubuque route, and the demand curve for tickets per day is Q = 170 - 2p (so p = 85 - Q/2) .Total costs of running a flight on this route are 850 + 10q, where q is the number of passengers on the flight.Each flight has a capacity of 80 passengers.In Cournot equilibrium, each duopolist will run one flight per day and will make a daily profit of

A) $400.
B) $425.
C) $170.
D) $800.
E) $1,750.

Correct Answer:

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