What is bc''s residual demand curve

Reference no: EM131251192

Consider the same setting as in the previous problem, but now suppose that the industry consists of a dominant firm, Braeutigam Cobalt (BC), which has a constant marginal cost equal to $40 per unit. There are nine other fringe producers, each of whom has a marginal cost curve MC = 40 + 10q, where q is the output of a typical fringe producer. Assume there are no fixed costs for any producer.

a) What is the supply curve of the competitive fringe?

b) What is BC's residual demand curve?

c) Find BC's profit-maximizing output and price. At this price, what is BC's market share?

d) Repeat parts (a) to (c) under the assumption that the competitive fringe consists of 18 firms.

Reference no: EM131251192

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