▁ ▁A ircraft ▁In ▁his ▁book ▁which ▁presented ▁the ▁model ▁to ▁the ▁general ▁public , ▁Paul ▁K rug man ▁used ▁the ▁example ▁of ▁the ▁aircraft ▁industry , ▁with ▁the ▁two ▁players ▁being ▁Air bus ▁and ▁Bo eing . ▁In ▁fact , ▁K rug man ▁and ▁Bald win ▁exam ined ▁the ▁industry ▁for ▁wide ▁bod ied ▁aircraft ▁in ▁the ▁context ▁of ▁the ▁model ▁in ▁a ▁ 1 9 8 8 ▁paper . ▁The ▁authors ▁cal ibr ate ▁an ▁extended ▁version ▁of ▁the ▁model ▁in ▁order ▁to ▁examine ▁the ▁effect ▁of ▁a ▁subs id y ▁to ▁Air bus ▁by ▁European ▁govern ments , ▁and ▁its ▁presence ▁in ▁a ▁market ▁which ▁can ▁only ▁support ▁two ▁fir ms ▁at ▁most , ▁world wide . ▁They ▁find ▁that ▁the ▁subs id y ▁had ▁an ▁un ambigu ously ▁negative ▁effect ▁on ▁w elf are ▁of ▁the ▁United ▁States ▁and ▁a ▁positive ▁effect ▁on ▁rest ▁of ▁the ▁world , ▁which ▁benefits ▁from ▁lower ▁prices . ▁The ▁result ▁for ▁Europe ▁h ing es ▁on ▁price ▁el astic ity ▁of ▁demand ; ▁for ▁relatively ▁in el astic ▁demand ▁the ▁net ▁effect ▁of ▁subs id y ▁is ▁positive ▁with ▁most ▁of ▁the ▁benefits ▁acc ru ing ▁to ▁European ▁consum ers , ▁but ▁for ▁el astic ▁demand , ▁social ▁w elf are ▁in ▁Europe ▁goes ▁down . ▁Import antly , ▁unlike ▁in ▁the ▁bas eline ▁Br ander ▁and ▁Sp encer ▁model , ▁K rug man ▁and ▁Bald win ▁find ▁that ▁the ▁changes ▁to ▁consumer ▁sur plus ▁resulting ▁from ▁the ▁subs id y ▁and ▁entry