Final answer:
The large firm's demand curve intersects the P-axis at a price of $90 when quantity demanded falls to zero. This is found by setting Q to zero in the market demand equation P = -0.5Q + 90. Graphing these equations provides valuable insights into market dynamics.
Step-by-step explanation:
The point where the large firm's demand curve touches the P-axis indicates the maximum price consumers are willing to pay for a product before the quantity demanded falls to zero. This can be determined by setting the quantity (Q) to zero in the market demand equation provided (P = -0.5Q + 90). Upon doing this, we find that P = 90 when Q = 0, which shows the intersection point on the P-axis is at a price of $90.
It's essential to graph these equations carefully as the interaction between demand and supply curves can reveal critical information such as equilibrium price and quantity. In the context of a monopolistic firm, the firm faces the market demand curve directly, which is typically downward sloping. Contrarily, in a perfectly competitive market, each firm perceives the demand curve to be flat due to the high level of competition preventing them from influencing the price, which is different from the market demand curve.