In Figure 8.10, 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, Fly Smart's entry-deterring quantity is:
A. 500 passengers per day.
B. 420 passengers per day.
C. 370 passengers per day.
D. 300 passengers per day.
Answer: C
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What will be an ideal response?
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