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Assume that there are only two airlines serving an airport each with the MC of $40. The market demand curve at this airport is MR

Assume that there are only two airlines serving an airport each with the MC of $40. The market demand curve at this airport is MR = 160 - Q.

a Supposing they perform as Cournot oligopolists, determine the price and total airlines outputs.

b Compare with the result under pure monopoly and perfect competition.

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