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2. There are five firms in an industry and one of them is a dominant firm and this industry supplies nearly a homogeneous product. Market demand function for the production of all the five firms is...

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2. There are five firms in an industry and one of them is a dominant firm and this industry supplies nearly a homogeneous product. Market demand function for the production of all the five firms is given as QM= 100-2P. Combined supply function of four small firms is given as Qs=10+P. Total cost function for the dominant firm is given as TCD= 50+6QD+ 0.25QD i) ii) Calculate the price and quantity supplied by the four small firms together Derive the demand function for the dominant firm 111) Calculate the profit maximizing quantity and price for the dominant firm. iv) Calculate the total demand
Extracted text: 2. There are five firms in an industry and one of them is a dominant firm and this industry supplies nearly a homogeneous product. Market demand function for the production of all the five firms is given as QM= 100-2P. Combined supply function of four small firms is given as Qs=10+P. Total cost function for the dominant firm is given as TCD= 50+6QD+ 0.25QD i) ii) Calculate the price and quantity supplied by the four small firms together Derive the demand function for the dominant firm 111) Calculate the profit maximizing quantity and price for the dominant firm. iv) Calculate the total demand
Answered 115 days After Jun 03, 2022

Solution

Komalavalli answered on Sep 26 2022
69 Votes
a)
TRs=P*Qs
TRs=(10+P)*Q = 10Q+PQ
MR = 10+P
TCD= 50+6QD+0.25QD2
MC= 50+6+0.5Q
MR = MC
56 = 0.5Q
Q = 56/0.5 = 112
Qs= 10+P
P = Qs-10
P = 112-10 =102
Small firm quantity is 112 and price is 102
)
Dominant firm demand curve QD = 100-2P-10+P = 90-P
c)
QD = 90-P
P = 90-QD
TR =...
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