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The demand function for an oligopolistic market is given by the equation, Q = 200 - 4P, where Q is the market quantity demanded and
The demand function for an oligopolistic market is given by the equation, Q = 200 - 4P, where Q is the market quantity demanded and P is price. The industry has one dominant firm and many small firms. The dominant firm's marginal cost function is: MC = 14 + 0.1QD. where QDis the quantity produced by the dominant firm.The small firms have a total supply function as QS = 30 + P. Derive the demand equation for the dominant oligopoly firm and answer the questions below.
- Determine the dominant oligopoly firm's profit-maximizing output (QD) and price (P). Answer: QD = and P = $
- Determine the value of the total output of the small firms (QS). Answer: QS =
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