Consider a Dominant Firm-Competitive Fringe model with the following assumptions. There are 100 ?rms that behave in a competitive manner and have identical cost functions given by c1(qf) = q?/Z . The dominant firm has zero marginal costs. Total demand is given by QM(p) = 1000 - 50p.
a. What is the supply curve of one of the competitive ?rms?
b. What is the total supply curve of the competitive fringe firms?
c. Compute the dominant firm's pro?t maximizing price?