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Q. Alchem (L) is the price leader in the polyglot market. All 10 other manufacturers [follower (F) firms] sell polyglot at the same price as Alchem. Alchem allows the other firms to sell as much as they wish at the established price also supplies the remainder of the Demand itself. Total Demand for polyglot is given by the following function (Qt = Ql + Qf): P = 20,000 -4Qt Alchem's marginal cost function for manufacturing also selling polyglot is MCl= 5,000 + 5Qt
The aggregate marginal cost function for the other manufacturers of polyglot isMCf = 2,000 +4Qf
Illustrate what is the total market Demand for polyglot at the price established by Alchem in Part (Price = $8,112)?
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