Author Question: Suppose the market demand curve (D) in an oligopoly market characterized by a dominant firm and a ... (Read 127 times)

mcmcdaniel · **on:** Jun 30, 2018

Suppose the market demand curve (D) in an oligopoly market characterized by a dominant firm and a fringe is given by Q = 25 - 2P. The fringe supply curve is given by QF = -1 + 0.3P. If the marginal cost of production for the dominant is 3, calculate the market price and total output produced by the dominant firm and the fringe.
a. Q = 14.42 units and P = 8.64
b. Q = 10.69 units and P = 7.15
c. Q = 12.69 units and P = 6.5
d. Q = 8.74 units and P = 5.15

Question 2

As a perfectly competitive firm produces at the point where price equals marginal cost, it has no supply curve, only a supply point.
a. True
b. False
Indicate whether the statement is true or false