Question: 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

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.

Step by Step Solution

★★★★★

3.46 Rating (175 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a The supply curve of the competitive fringe is the horizontal summation of the marginal cost curves ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

846-B-E-D-S (2412).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

The motor home industry consists of a small number of large firms. In 2003, producers of motor homes had an average advertising sales ratio of 1.8 percent. Assuming that the price elasticity of...

The market demand curve in the nickel industry in Australia is given by Qd = 400 - 8P. The industry is dominated by a large firm with a constant marginal cost of $10 per unit. There also exists a...

Firm 1 is a member of a monopolistically competitive market. Its total cost function is C = 900 + 60Q1 + 9Q12. The demand curve for the firms differentiated product is given by P = 660 - 16Q1. a....

13.20. 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...

1. (15 points) In the following, let the market demand curve be P = 70 - 2Q, and assume all sellers can produce at a constant marginal cost of c = 10, with zero fixed costs. a) If the market is...

Someone to help here with these 5) Suppose that you operate a water park. You have the following demands for your rides. Rides have a marginal cost of $5. 50-P, (Adults) 30- P. (Children) a) If you...

Give correct solutions. It is estimated that 16% of the cost of goods sold represents fixed factory overhead costs and that 22% of the operating expenses are fixed. Since Royal Cola is only one of...

econ 6. Consider Baumol and Klevorick's model of rate of return regulation, with the added complication that revenue is uncertain. In particular, in addition to the usual assumptions of the model,...

solve the following... tutors please help this is a very complete question.. What is your understanding of the value of CDA in understanding the way we see the world, the way that the world is...

!Macroeconomic expert please.. Consider a homogeneous good industry (such as an agricultural product) with just two firms and a total market demand Q = 400-P, so the inverse demand is P = 400 - Q....

In the chapter, when describing Figure 2-4a, it was argued that the Received and Summarizes relationships and TREASURER entity were not necessary. Within the context of this explanation, this is...

Uriah Westwood plc is an advertising agency which operates from rented offices in the West End of London. Ulverstone Thunderbird plc is a company engaged in heavy engineering. It owns all of its...

Private equity firms are increasingly investing in professional sports teams and leagues. What is the primary motivation for private equity investment in sports? Group of answer choices To promote...

A project manager is trying to budget time for the various processes in the Project Schedule Management Knowledge Area. As project activities are performed, in which of these processes will the...

In 2008, cruise ship lines announced they were increasing prices from $ 7 to $ 9 per person per day because of increased fuel costs. According to one analyst, fuel costs for Carnival Corporations...

To examine the trade- off between efficiency and market power from a merger, consider a market with two firms that sell identical products. Firm 1 has a constant marginal cost of 1, and Firm 2 has a...

Your college is considering renting space in the student union to one or two commercial textbook stores. The rent the college can charge per square foot of space depends on the firms profit...

Bethesda Mining Company reports the following balance sheet information for 2013 and 2014. Required: Prepare the 2013 and 2014 common-size balance sheets for Bethesda Mining. (Do not round...

Please complete the following tables using canadian tax laws It is January 3, 2022. Hayley Stewart, the controller for the Fraser Operating Group, is reviewing the GST compliance requirements for the...

Mining Corp has 9 million shares of common stock outstanding, 350000 shares of preferred stock outstanding with $9 annual stated dividend, and 120000 bonds outstanding with a 10% semiannual coupon...