Final answer:
The question involves calculating the optimal supply quantity and pricing for a firm in an oligopolistic market, using knowledge of marginal revenue and marginal cost with no fixed costs. By analyzing demand functions and cost structures, the firm can determine the profit-maximizing quantity and price.
Step-by-step explanation:
The student's question pertains to calculating how much product a firm should supply in an oligopolistic market where there are two customers with different inverse demand functions and a constant marginal cost per unit. The concept of oligopoly, marginal revenue, and marginal cost are key in determining the quantity of products that a firm should supply at a specific price. In the context given, where the firm has zero fixed costs, the calculation of total revenue, marginal revenue, and marginal cost is crucial for pricing and output decisions.
The provided information suggests a method to determine the optimal quantity and price for a product. By working out the change in total revenue divided by the change in quantity, firms can calculate the marginal revenue. Then, they compare it with the marginal cost, which is the change in total cost divided by the change in quantity, to decide the optimal quantity to produce. Since average cost is also factored in by dividing the total cost by quantity, the firm can evaluate its pricing strategy to ensure it does not incur losses.
By applying these economic principles, the firm can identify the point where marginal revenue equals marginal cost, which is essential for profit maximization in oligopolistic markets. This approach to price determination and supply quantity ensures that firms remain competitive and profitable in industries where market power is concentrated among a few players.