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Part A - Shipping Lines' Perspective 1. Considering the actors (i.e., two shipping lines and the port authorities) and the predetermined cost functions described below
Part A - Shipping Lines' Perspective 1. Considering the actors (i.e., two shipping lines and the port authorities) and the predetermined cost functions described below (i.e., transportation costs and port fees), and determine the equilibrium outcome (price, quantity, and profit) of the game. Let q for i = 1,2 denote the number of containers transported by shipping line i. Assume a standard inverse demand function for a container of the form P = 10 000 - (q1 + 92) he Port of Gothenburg, private operators through concession contracts manage port terminals. However, to simplify the study, we assume that the Port Authority in Gothenburg is operating their terminals. and a total transportation cost function, excluding fixed costs, of the form TC = 100q + (q )2 for i = 1,2, and t= low, high, representing low and high diseconomies of scale, i.e., dlow
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