Please answer all steps of problem 1
Please answer this 
United Airlines is considering expanding its service from Greensboro's Piedmont Triad International Airport (GSO). They are considering two options and you are asked to evaluate the profitability of the different choices over several subparts of this question. (a) There are currently no other airlines providing direct service to Boston Logan airport. Given the number of local students who live in the northeast, United has estimated the demand for this flight to be P=500Q, where Q is the number of seats sold per day, and that the total cost per day is 100Q. First, what market structure best describes this flight from GSO to BOS? Next, find the profit maximizing Quantity, Price and Profit from operating this flight. (b) Another option for United is to add service to Miami, as many local students enjoy visiting the area, especially in mid-March. There is currently one direct flight offered per day to Miami, by American Airlines. The estimated demand for seats to Miami is P=9902Q, where Q is the total quantity sold per day. (Hint: If both American and United offer seats the inverse demand curve is P=9902(QA+QU), where QA is American's quantity and QU is United's quantity). American has a total cost of 100QA for seats to Miami. United has found a way to have a total cost of 50QU. Find the reactions functions for both airlines. (c) If the two airlines announce their flight schedule at the same time (Cournot competition), how many seats will each airline offer per day (QA and QU), what will be the market price and how much profit will each airline make? (d) As the incumbent airline, American can announce their flight schedule before United does (Stackelberg competition). If American announces first and United also offers service to Miami, how many seats will each airline offer (QA and QU), what will be the market price and how much profit will each airline make? (e) What advice would you give to United Airlines based on you analysis? Which market, if any, would you recommend they enter and why? You should keep in mind that American Airlines is a competitive firm and also wants to maximize profit. Economic Policy and Global Environment Problem Set #6 Due Wednesday, November 16 (submitted through Moodle) Problem 1 ( 30 points) United Airlines is considering exparding its service from Greensbom's Pledmont Triad International Ainoot iG50), They are considering two options and you are asked to evaluate the profitability of the different choices over several subparts of this cuestion: (a) Thare are currently no ather airlincs providing direct servide ta Baston Logsn airport. Given the number of local aturionts who live in the nerthonst, United has ostimated the demand for this flight to he P55DOQ where Q is the number of seats sold per day, and that the total cost per day is 100Q. Fint, what market structure best describes this flight from G5O to BCSi Next, find the profit maximizing Quartity, Price and Prafit from aperating this flight. |b| Anather actian for United is to add service ta Niami, as many lecal students enjoy visiting the areo, aspecially in mid March. There is current'y one direct flight affered par day to Miami, by Amarican Aitlines. The estimated demand for seats to N ismi is P=9902Q, where Q is the total quantity sold per day. (Hint: If both Amerizan and United offer seats the inverye demand curve is P=9902iQA+Qe ). where QA is American's quantity and QU is United's quantity). Amerien has a tatal cast of 100QA for scats to Miami. United has found a way to have a total coat of SQQ. Find the reartions functiara for toth airlines. (c) If the two airlines announce their fight schedule at the same time (Cournot competitionl, hew marny seats will each airline offer per tay 1QA and Qy L. what will be the market price and haw much profit will each airline make? |c| As the incumberit airline, American can annaunce their flight schedule before United does I5tackelbere compecitions. If American announces tirst ard United also offers service to Miami, how rany seats will each airline ofter QA and Qvl, what will be the market price and hew much prolit will each airline rake? (e) What actice would you eve to Uoited Airlines based on wou ane ysis? Which market, if arw, would you recommend they enter and whyi You should keep in mind that American Airlines is a competitive firm and also wants to maximize proft. United Airlines is considering expanding its service from Greensboro's Piedmont Triad International Airport (GSO). They are considering two options and you are asked to evaluate the profitability of the different choices over several subparts of this question. (a) There are currently no other airlines providing direct service to Boston Logan airport. Given the number of local students who live in the northeast, United has estimated the demand for this flight to be P=500Q, where Q is the number of seats sold per day, and that the total cost per day is 100Q. First, what market structure best describes this flight from GSO to BOS? Next, find the profit maximizing Quantity, Price and Profit from operating this flight. (b) Another option for United is to add service to Miami, as many local students enjoy visiting the area, especially in mid-March. There is currently one direct flight offered per day to Miami, by American Airlines. The estimated demand for seats to Miami is P=9902Q, where Q is the total quantity sold per day. (Hint: If both American and United offer seats the inverse demand curve is P=9902(QA+QU), where QA is American's quantity and QU is United's quantity). American has a total cost of 100QA for seats to Miami. United has found a way to have a total cost of 50QU. Find the reactions functions for both airlines. (c) If the two airlines announce their flight schedule at the same time (Cournot competition), how many seats will each airline offer per day (QA and QU), what will be the market price and how much profit will each airline make? (d) As the incumbent airline, American can announce their flight schedule before United does (Stackelberg competition). If American announces first and United also offers service to Miami, how many seats will each airline offer (QA and QU), what will be the market price and how much profit will each airline make? (e) What advice would you give to United Airlines based on you analysis? Which market, if any, would you recommend they enter and why? You should keep in mind that American Airlines is a competitive firm and also wants to maximize profit. Economic Policy and Global Environment Problem Set #6 Due Wednesday, November 16 (submitted through Moodle) Problem 1 ( 30 points) United Airlines is considering exparding its service from Greensbom's Pledmont Triad International Ainoot iG50), They are considering two options and you are asked to evaluate the profitability of the different choices over several subparts of this cuestion: (a) Thare are currently no ather airlincs providing direct servide ta Baston Logsn airport. Given the number of local aturionts who live in the nerthonst, United has ostimated the demand for this flight to he P55DOQ where Q is the number of seats sold per day, and that the total cost per day is 100Q. Fint, what market structure best describes this flight from G5O to BCSi Next, find the profit maximizing Quartity, Price and Prafit from aperating this flight. |b| Anather actian for United is to add service ta Niami, as many lecal students enjoy visiting the areo, aspecially in mid March. There is current'y one direct flight affered par day to Miami, by Amarican Aitlines. The estimated demand for seats to N ismi is P=9902Q, where Q is the total quantity sold per day. (Hint: If both Amerizan and United offer seats the inverye demand curve is P=9902iQA+Qe ). where QA is American's quantity and QU is United's quantity). Amerien has a tatal cast of 100QA for scats to Miami. United has found a way to have a total coat of SQQ. Find the reartions functiara for toth airlines. (c) If the two airlines announce their fight schedule at the same time (Cournot competitionl, hew marny seats will each airline offer per tay 1QA and Qy L. what will be the market price and haw much profit will each airline make? |c| As the incumberit airline, American can annaunce their flight schedule before United does I5tackelbere compecitions. If American announces tirst ard United also offers service to Miami, how rany seats will each airline ofter QA and Qvl, what will be the market price and hew much prolit will each airline rake? (e) What actice would you eve to Uoited Airlines based on wou ane ysis? Which market, if arw, would you recommend they enter and whyi You should keep in mind that American Airlines is a competitive firm and also wants to maximize proft
