In Figure 12.6, airline Fly Smart is initially a secure monopoly between two cities X and Y at point M, serving 300 passengers per day at the profit maximizing price of $300 per ticket. Suppose that Fly Smart discovers that a second airline is contemplating entering the market. If the minimum market entry quantity is 130 passengers per day, what price should Smart Fly charge to secure the entry-deterring quantity?
A. $300
B. $220
C. $180
D. $100
Answer: B
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Refer to Figure 2-13. Which two arrows in the diagram depict the following transaction: Lizzie Haxem hires "The Paint Pros," a professional painting company, to paint her home
A) J and G B) K and M C) K and G D) J and M
What type of business is most likely to be run as a family business?
a. multinational b. corporation c. partnership d. mutual fund e. sole proprietorship
To illustrate the ultimate impact of the multiplier process when investment spending falls, we should
A. Shift the AD curve rightward once. B. Shift the AD curve leftward and then shift the AS curve leftward. C. Shift the AD curve leftward twice, once for the autonomous change and second for the multiplier effect. D. Shift the AD curve leftward and then rightward.
Firms under-invest in safety because
A) firms are not concerned with safety. B) firms do not want their plants to be safe. C) firms are risk averse. D) firms do not enjoy all of the benefits from investments in safety.