2.1 Industry structure The airport shuttle services market is best modelled as Cournot competition. This is because competing firms must lease shuttle buses and establish supporting technical in frastructure before offering airport shuttle services. Demand for airport shuttle services Is, Q = 450.000 5. DOOR where 0 represents the total number of passengers transported per year. and P is the price per passenger. At present, CAS charges $50 a person and transports 200.000 passengers per year, returning an operating profit of $5.000.000 per year into government revenues. The competition authority expects that after implementing the market reforms, all firms in the market (including CAS) will be more efficient. It expects that all firms will face the same cost structure with the marginal cost of transporting a passenger being $4, and the fixed cost of operating a shuttle service being $1,000,000 per year