Essay
A large firm that is a price leader in an industry characterized also by many small competing firms estimates that the market demand for its product to be as follows:
Qm = 40,700 - 100P
where Qm is units per month.
It expects small firms in the industry to supply output according to the following function:
Qs = 700 + 25P
The large firm's marginal cost function is
MCL = 100 + .016Q
a. What quantity will the large firm sell?
b. What price will the large firm set?
c. What quantity will the small firms sell?
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a. The large firm's demand function is g...View Answer
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