### Ncrease in demand exactly offsets the decrease in supply

##### Reference no: EM1312154

Q1. Illustrate what will happen to the equilibrium quantity also price of a product in a competitive marketplace when the increase in demand exactly offsets the decrease in supply?

Q2. suppose that 2 airlines are Cournot duopolists serve the Peoria-Dubuque route also the demand curve for tickets every day is Q = 220 - 2p (so p = 110 - Q/2 ). Total costs of running a flight on this route are 1,400 + 20q, where q is the number of passengers on the flight. Every flight has a capacity of 80 passengers. In Cournot equilibrium, every duopolist will run one flight every day also will make a daily profit of: a)\$400 b)\$800 c)\$220 d)\$700 e)\$3000.

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