Suppose that there is "dominant" firm with total cost function ofc(q) = 100 + 10g + 0.25q². It faces a market demand function(inverse) of p = 100 – 0.5Q, where Q indicates total market supply.This dominant firm has to deal with 10 fringe firms, each of whombehaves perfectly competitively. Each fringe firm has a marginal costdc(q)= 20q + 25functiondq• alculate the supply function of the fringe firms• Using this, calculate the residual demand function of the dominant firm.• Derive the marginal revenue function of the dominant firm.• Find the profit-maximizing price of the dominant firm.• How much does the competitive fringe supply to the market?

Suppose that there is "dominant" firm with total cost function of c(q) = 100 + 10q + 0.25q². It faces a market demand function (inverse) of p = 100 – 0.5Q, where Q indicates total market supply. This dominant firm has to deal with 10 fringe firms, each of whom behaves perfectly competitively. Each fringe firm has a marginal cost dc(q) function dq • Calculate the supply function of the fringe firms • Using this, calculate the residual demand function of the dominant firm. • Derive the marginal revenue function of the dominant firm. = 20g + 25

Suppose that there is "dominant" firm with total cost function of c(q) = 100 + 10q + 0.25q². It faces a market demand function (inverse) of p = 100 – 0.5Q, where Q indicates total market supply. This dominant firm has to deal with 10 fringe firms, each of whom behaves perfectly competitively. Each fringe firm has a marginal cost dc(q) function dq • Calculate the supply function of the fringe firms • Using this, calculate the residual demand function of the dominant firm. • Derive the marginal revenue function of the dominant firm. = 20g + 25

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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