Description
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.
Unformatted Attachment Preview
Purchase answer to see full attachment
Explanation & Answer
I always keep my word. Here is the assignment. Kindly review and leave an excelent rating.
Running head: MANAGERIAL ECONOMICS
Managerial Economics Assignment
Student Name
University Affiliation
1
MANAGERIAL ECONOMICS
Question 1 Kiwi Inc
A. Output and price for Kiwi
Kiwi maximizes profit by setting [MR] = [MC] since it’s a monopolistic firm.
Therefore,
= 6 – 4Q = 2, imply Q = 1 million pounds and P = $4 per pound.
B. Long run output and Price in Perfect Competition
Price [PC] = LAC = $2 per pound
Quantity [QC] = 2 million pounds.
C. Equilibrium Price and the effect of the tariff
The new price will be $2 + $1 = $3....