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A market has many small firms and one dominant firm. Market demand is givby 100-4P. The dominant firm has a constant marginal cost of S4. All the smaller fringe firms combined have a supply curve given
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A market has many small firms and one dominant firm. Market demand is givby 100-4P. The dominant firm has a constant marginal cost of S4. All the smaller fringe firms combined have a supply curve given by Qs 6P-20. The profit-maximizing quantity produced by the dominant fim is_____.

User Edward Ashak
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Answer: Marginal cost under demand and supply theory. Answer is 80

Explanation: QD 100-4P, Marginal Cost =S4,QS =6P -20. So

the calculation goes thus = QS=6p-20

Inputing Marginal value of 4 equates 100-4(4)

100-16 = 84

QS=6(4)-4

24-20=4

profit maximisation =QD-QS

84-4=80

User Josephting
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