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suppose the airline industry consisted of only two firm: American and Texas Air Corp. Let the two firms have identical cost function, C(q) = 40q.

suppose the airline industry consisted of only two firm: American and Texas Air Corp. Let the two firms have identical cost function, C(q) = 40q. Assume that demand curve for industry is given by P=100-Q and that each firm expects the other to behave as a Cournot competitor.

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