14.19. Boeing and Airbus are competing to fill an order of jets for Singapore Airlines. Each firm...
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14.19. Boeing and Airbus are competing to fill an order of jets for Singapore Airlines. Each firm can offer a price of $10 million per jet or $5 million per jet. If both firms offer the same price, the airline will split the order between the two firms, 50–50. If one firm offers a higher price than the other, the lower-price competitor wins the entire order. Here is the profit that Boeing and Airbus expect they could earn from this transaction:
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