Firm A is the dominant firm in a market where industry demand is given by Qd = 48-4P. There are four "follower" firms, each with long-run marginal cost given by MC= 6 + Qf. Firm A's long run marginal cost is 6.
a. Write the expression for the total supply curve of the followers (qs) as this depends on price. (Remember, each follower acts as a price taker.)
b. Find the net demand curve-facing firm A. Determine A's optimal price and output. How much output do the other firms supply in total?
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Oligopoly Quantity competition is assessed.
Monopolistic Competition & Oligopoly
Explain which market structure this firm operating in attached file. Compare the long-run quantity and price to those of a perfectly competitive firm. What accounts for the difference? Is the equilibrium price greater than, equal to, or less than marginal cost? Why or why not?View Full Posting Details