A company in the oligopolistic industry has recognized two sets of the demand curves. If the company is the only one which changes prices (i.e., other companies don’t follow its lead), its demand curve is Q = 82 – 8P. If, but, it is anticipated that competitors will follow the price actions of company, then the demand curve will be Q = 44 – 3P.
1. Make a demand schedule for both demand curves and make them on an Excel graph.
2. Compute the marginal revenue for each.
3. If the present price and quantity is situated at the intersection of two demand curves, and competitors follow price diminishes but not price raises, show in the graph the relevant demand curve to company.
4. Make and graph the suitable marginal revenue curves for both demand curves on Excel diagram.
5. Demonstrate on the graph the range over which a marginal cost curve could increase or fall down without affecting the price firm charges.