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 = 160 - 2p (so p = 80 - Q/2) .Total costs of running a flight on this route are 400 + 20q, 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) $800.
B) $400.
C) $200.
D) $160.
E) $1,600.

Correct Answer:

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