Alchem l is the price leader in the polyglue market all, Ask an Expert

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Alchem (L) is the price leader in the polyglue market. All four other manufacturers [follower(F) firms] sell polyglue at the same price as Alchem. Alchem allows the other firms to sell as much as they wish at the established price and supplies the remainder of the demand itself. Total demand for polyglue is given by the following function QT = QL + QF P = 3000 - 3QT Alchem's marginal cost function for manufacturing and selling polyglue is: MCL = 300 + 2.5QL The aggregate marginal cost function for the other manufacturers of polyglue is: ?MCF = 200 + 2QF (a) In order to maximise profits, how much polyglue should Alchem produce and what price should they 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 the follower firms supply?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91950682

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