Question 3 The overall industry demand curve is P : 100Q. Suppose there is a dominant rm with marginal cost M C = 18 behave as a price leader, and there are many small competitive rms behave as price takers (they take the price set by the dominant rm as given). The sum of the supply by the competitive fringe is P = 10 +462 (i.e. this is the total supply of the competitive rms). What is the residual demand? What price should the dominant rm set? For simplicity, you can refer to the following diagram and calculate the relevant prices and quantities