Essay
A firm's research department has estimated that if other firms in the industry are indifferent to changes in the price of its product, its demand curve will be
Q1 = 1150 - 50P
However, if other firms always charge the same price it does, the firm's demand curve will be
Q2 = 250 - 10P
a. If the firm's marginal cost equals $17.50, what output and price will maximize profit? Assume that the other firms will not follow a price rise above $22.50 but they will follow a price decrease below $22.50)
b. If the firm's marginal cost equals $22.09, what output and price will maximize profit?
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a. This is an oligopolistic firm faced w...View Answer
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