Answer to Question #71169 in Macroeconomics for nurain
ALCHEM'S marginal cost function for manufacturing and selling polyglue is:
the agregate marginal cost function for the other manufacturers of polyglue is:
A) to maximise profits how much polyglue should Alchem produce and what price should it charge
B) what is the total market demand for polyglue at the price established by alchem in part (A)? how much of total demand do follower firms supply?
MCL = 100 + 3QL, ∑MCF = 50 + 2QF.
A) to maximise profits Alchem should produce at MR = MC,
MR = TR' = (P*Q)' = 10,000 - 20QT,
10,000 - 20Q = 100 + 3Q,
23Q = 9,900,
Q = 430 units.
P = 10,000 - 10*430 = $5,700.
B) The total market demand for polyglue at the price established by alchem in part (A) is:
5,700 = 10,000 - 10QT,
10QT = 4,300,
QT = 430 units.
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