ch12_p4 - firm and the quantity produced and price charged...

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12_4. Suppose the market for tennis shoes has one dominant firm and five fringe firms.  The market demand is Q=400-2P.  The dominant firm has a constant marginal cost of 20.  The fringe firms each have a marginal cost of MC=20+5q. a. Verify that the total supply curve for the five fringe firms is  Q f = P - 20 . b. Find the dominant firm’s demand curve. c. Find the profit-maximizing quantity produced and price charged by the dominant 
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Unformatted text preview: firm, and the quantity produced and price charged by each of the fringe firms. d. Suppose there are ten fringe firms instead of five. How does this change your results? e. Suppose there continue to be five fringe firms but they each manage to reduce their marginal cost to MC=20+2q. How does this change your results?...
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This note was uploaded on 12/28/2009 for the course ECON 120 taught by Professor Walsh during the Fall '09 term at University of Illinois, Urbana Champaign.

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