the manager with the information needed to complete the assignment. The market demand curve in the spring water bottling industry in Jettingland is given by Qd = 400-8P. The spring water bottling industry is dominated by a large firm with a constant marginal cost of R10 per unit. A competitive fringe of 100 firms also exists, each of which has a marginal cost given by MC = 10 + 50q, where q is the output of

the manager with the information needed to complete the assignment. The market demand curve in the spring water bottling industry in Jettingland is given by Qd = 400-8P. The spring water bottling industry is dominated by a large firm with a constant marginal cost of R10 per unit. A competitive fringe of 100 firms also exists, each of which has a marginal cost given by MC = 10 + 50q, where q is the output of

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter12: Price And Output Determination: Oligopoly

Section: Chapter Questions

Problem 5E

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Glyde Air Fresheners is the dominant firm in the solid room aromatizer industry, which has a total market demand given by Q = 80 - 2P. Glyde has competition from a fringe of four small firms that produce where their individual marginal cost equals the market price. The fringe firms each have a total cost given by: TCi = 10Qi + 2Qi2. If Glyde’s total costs are given by TCG = 100 + 6QG a) what price should Glyde establish for air fresheners? b) what is Glyde’s maximum profit?
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Glyde Air Fresheners is the dominant firm in the solid room aromatizer industry, which has a total market demand given by Q = 80 - 2P. Glyde has competition from a fringe of four small firms that produce where their individual marginal costs equal the market price. The fringe firms each have total costs given by TC; = 10Q; + 2Q²;. If Glyde's total costs are given by TCG = 100 + 6QG, what are the total profits of the fringe firms?