A market has many small firms and one dominant firm. The market demand is Q = 100-5P. The dominant firm has a constant marginal cost of $6. All the smaller fringe firms combined have a supply curve given by Qs = 4P-8. The dominant firm sets the market price, and the fringe firms act as price takers. The dominant firm allows the fringe firms to sell as many units as they want at the price set by the dominant firm. The rest of the market is then supplied by the dominant firm. The profit-maximizing quantity produced by the dominant firm is units and price it charges is $. (Enter your responses as integers.) The fringe firms will produce and sell a total of units at the market price or your response as an integer.)
A market has many small firms and one dominant firm. The market demand is Q = 100-5P. The dominant firm has a constant marginal cost of $6. All the smaller fringe firms combined have a supply curve given by Qs = 4P-8. The dominant firm sets the market price, and the fringe firms act as price takers. The dominant firm allows the fringe firms to sell as many units as they want at the price set by the dominant firm. The rest of the market is then supplied by the dominant firm. The profit-maximizing quantity produced by the dominant firm is units and price it charges is $. (Enter your responses as integers.) The fringe firms will produce and sell a total of units at the market price or your response as an integer.)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter13: best-practice Tactics: Game Theory
Section: Chapter Questions
Problem 1E
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Transcribed Image Text:A market has many small firms and one dominant firm. The market demand is Q = 100-5P. The dominant firm has a constant
marginal cost of $6. All the smaller fringe firms combined have a supply curve given by Qs = 4P-8.
The dominant firm sets the market price, and the fringe firms act as price takers. The dominant firm allows the fringe firms to sell as
(Enter your responses
many units as they want at the price set by the dominant firm. The rest of the market is then supplied by the dominant firm.
The profit-maximizing quantity produced by the dominant firm is units and the price it charges is $
as integers.)
The fringe firms will produce and sell a total of units at the market price r your response as an integer.)
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