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# 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 Preview

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 ...

#### Solution Summary

The decision rule for perfect competion is utilized.

\$2.49