The Demand Function for an Oligopolistic Market Is Given by the Equation

Essay

The demand function for an oligopolistic market is given by the equation, Q = 180 - 4P, where Q is quantity demanded and P is price. The industry has one dominant firm whose marginal cost function is: MC = 12 + .1QD, and many small firms, with a total supply function: QS = 20 + P.
(a) Derive the demand equation for the dominant oligopoly firm.
(b) Determine the dominant oligopoly firm’s profit-maximizing output and price.
(c) Determine the total output of the small firms.