The decision rule for perfect competion
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Here is a problem that I am trying to figure out:
Wkly. output Apple Airlines(A) Big Bird(B) Chancy Airlines, ltd.(C)
1 $40 $20 $50
2 30 25 40
3 25 30 45
4 35 35 55
5 50 40 65
6 60 50 75
The current fare market price of $45 can't be raised. Thus P=MR=$45
I have to
a) calculate current industry output and the market share of each airline and
b) calculate industry output if the introducation of a high speed passenger train forces airline industry prices down to $35.
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Solution Summary
The decision rule for perfect competion is utilized.
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The decision rule for perfect competion is MR=P>=MC
I hope the values provided in the table are the MC values
when P=45, A will ...
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