Question
Jetstar has just one category of tickets and just one set price. If demand is Q = 600 - P, and the marginal cost of
Jetstar has just one category of tickets and just one set price. If demand is Q = 600 - P, and the marginal cost of an additional passenger is $120 in fuel, now suppose that Tiger enters the same market and competes with Jetsar. Tiger has the same marginal cost as Jetstar, $120 per passenger. Competition between the two firms is Bertrand (price war). What is the market price, if demand is Q = 600 - P, and they each have a plane with 200 seats?
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Financial Reporting And Analysis
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
8th Edition
1260247848, 978-1260247848
