The world market for large passenger jet airplanes is an oligopoly dominated by two firms: Boeing in the United States and Airbus in Europe.
a. Explain why the market equilibrium might involve either a low price for airplanes or a high price for airplanes
b. From the perspective of the well-being of the United States (or Europe), why might a high-price equilibrium be desirable?
c. What price outcome is desirable for Japan or Brazil? Why?
d. If the outcome is the high-price equilibrium, does Japan or Brazil still gain from importing airplanes? Explain.