The Sioux Gateway Airport (SUX) is a small airport located inSioux City, IA. Currently, American Arilines is the only airlinewhich flies out of SUX; flights go from SUX to Chicago/O'Hareairport (ORD). Other airlines, such as Frontier have consideredoffering flights from SUX to the Denver Airport (DEN).
Suppose an airport similar to SUX has a single, dominant carrier(DC) which makes 4 trips per day to and from SUX to ORD. As theonly carrier, DC can charge monopoly prices and make monopolyprofit. DC's demand function is as follows: QDC = 285 - .75PDC. DChas $15 000 per day in fixed costs and the marginal cost perpassenger is $40.

	QDC =	285	-	0.75	PDC
DC Fixed ?osts	$15,000
DC Marginal Cost	$40
find the profitmaximizing price for DC. How many tickets do they sell each day?What is DC's daily profit?
Dominant Carrier
Price	$0.00
Quantity Demanded	0	tickets
Total Revenue	$0.00
Total Cost	$0.00
Profit	$0.00
Suppose another,secondary carrier (SC), decides to offer a flight each day to andfrom SUX to DEN; this monopoly market has become a two-firmoligopoly with a dominant firm. SC's demand function is as follows:QSC = 120 - .5PSC + .2PDC. SChas $5 000 per day and the marginal cost per passenger is $60.Additionally, DC's demand function shifts and changes toQDC = 225 - .75PDC + .25PSC.
	QSC =	120	-	0.50	PSC	+	0.20	PDC
	QDC =	225	-	0.75	PDC	+	0.25	PSC
SC Fixed ?osts	$5,000
SC Marginal Cost	$60
Add SC's demandand cost information. Also, add a formula to calculate DC and SC'sjoint profits. Be sure to connect DC's price to the SC template andSC's price to the DC template. Assuming DC continues to charge the price you found in part a, whatprice should SC charge? How many tickets do they sell? What istheir profit? (Use Solver to find this.)
Dominant Carrier
Price
Quantity Demanded		tickets
Total Revenue
Total Cost
Profit
Secondary Carrier
Price
Quantity Demanded		tickets
Total Revenue
Total Cost
Profit
Joint Profit