Problem
You are given the following total demand function for an oligopolistic industry characterized by price leadership:
P = 190 - 2Q
Where, Q = total quantity demanded. You are also given the following supply function for other firms in the industry:
P = 50 + 2q
Where, q = supply of other firms. Finally, assume that the leader has the following marginal cost function:
MCL = 30 + 4QL
• Determine the optimal price and output for the leader.
• Determine the output produced by the other firms.