The competitive fringe supply function (total): QF=2P-12 The dominant firms marginal cost function: MC = 12 + (1⁄2)QD. a) What is the equilibrium price set by the dominant firm? Calculate the total market demand at the price found. b) How much will the competitive fringe supply to the market at the price found in question 2(a)? c) How much will the dominant firm supply to the market at the price found in question 2(a)?
A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms.
Total market
The competitive fringe supply function (total): QF=2P-12
The dominant firms marginal cost function: MC = 12 + (1⁄2)QD.
a) What is the
b) How much will the competitive fringe supply to the market at the price found in question 2(a)?
c) How much will the dominant firm supply to the market at the price found in question 2(a)?
d) Show the above answers graphically.
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