A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL-300 - (2.5) P The competitive fringe supply function (total): Q=2P-12 The dominant firms marginal cost function: MC = 12 + (14) QD. a) What is the equilibrium price set by the dominant firm? b) How much will the competitive fringe supply to the market at the price found in question (a)? Show the answers graphically.
A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL-300 - (2.5) P The competitive fringe supply function (total): Q=2P-12 The dominant firms marginal cost function: MC = 12 + (14) QD. a) What is the equilibrium price set by the dominant firm? b) How much will the competitive fringe supply to the market at the price found in question (a)? Show the answers graphically.
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter24: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 7CQ
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![A market consists of a dominant firm and a number of fringe firms. The followings are the information about these
firms.
Total market demand: QALL-300- (2.5) P
The competitive fringe supply function (total): Q-2P-12
The dominant firms marginal cost function: MC = 12 + (14) QD.
a) What is the equilibrium price set by the dominant firm?
b) How much will the competitive fringe supply to the market at the price found in question (a)?
Show the answers graphically.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F039f2aa6-1fe6-4656-ae52-674a5ed746df%2F0f2d764e-48d1-4cb3-90e9-547682ea3953%2Fpyh2d5r_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A market consists of a dominant firm and a number of fringe firms. The followings are the information about these
firms.
Total market demand: QALL-300- (2.5) P
The competitive fringe supply function (total): Q-2P-12
The dominant firms marginal cost function: MC = 12 + (14) QD.
a) What is the equilibrium price set by the dominant firm?
b) How much will the competitive fringe supply to the market at the price found in question (a)?
Show the answers graphically.
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