Re: Competitive fringe Economics Calculus question Please He
jadenb11 said:
Could someone please help me solve an Economics Calculus problem
Given
Total Cost of fringe
TC= 50 + 10q + 3q^2
MC = 10 + 6q
Total Cost of Dominant firm
TC = 12,000 + 3q + 5q^2
MC = 3 + 10Q
P = 5000 - Q
Find Quantity for fringe
Find Quantity for dominant firm
Find Profit for fringe
Find profit for dominant firm
I shall try to help (not solve for you). However, it is very difficult to help because it is not clear what the problem is. Few terms are defined. You use majuscule Q and minuscule q, which may or may not represent different variables. In particular, I am guessing that a "fringe" means a firm that accepts the price set by a dominant firm.
Dominant Firm
Q is quantity sold by dominant firm.
Price which dominant firm sets = P = 5000 - Q.
Total cost for dominant firm = C = 12000 + 3Q + 5Q[sup:17tqa6i3]2[/sup:17tqa6i3].
Marginal cost for dominant firm = dC/dQ = 3 + 10Q.
IS THAT CORRECT?
What is the GENERAL formula for finding the sales quantity that maximizes profits?
What is the formula for finding total revenue?
What is the formula for finding marginal revenue?
Fringe Firm
q is quantity sold by fringe firm.
Price which dominant firm sets = P.
Total cost for fringe firm = c = 50 + 10q + 3q[sup:17tqa6i3]2[/sup:17tqa6i3].
Marginal cost for fringe firm = dc/dq = 10 + 6q.
Is that correct?
Same three questions for the fringe firm.
If I have guessed correctly what the problem is, the first step is to solve the pricing and output problem for the dominant firm because it sets the price that the fringe firm reacts to. Does that make sense?
