Answer to Question #64152 in Economics for JIER

Question

In 2004, Boeing produced fewer planes than Airbus (see Figure). If Boeing finds itself less profitable at 60 percent market share than at 45 percent, what is the likely impact on the Airbus-Boeing tactical competition?

Answer 1

If Boeing finds itself less profitable at 60 percent market share than at 45 percent, then the likely impact on the Airbus-Boeing tactical competition is that Boeing will not try to expand production or lower the price, but will continue producing planes as before.