Consider a market where demand is p = 210 - Q. This market is served by a dominant firm with a marginal cost of 20. This firm moves first by setting the market price. Also in this market are a large number of competitive firms who, collectively, have the supply function Q_s = 120 + p/2 for all prices greater than or equal to 20.

a)What is the residual demand faced by the dominant firm? What price does the dominant firm set and what quantity does it sell? What quantity do the competitive firms supply?

b)If this market were served only by the dominant firm as a monoply, what price and quantity would you expect to see?

c)If the market were served by two identical firms competing in quantities where both firms had marginal cost 20, what quantity would each firm produce and what would the market price be?