Competitive Oligopoly
Assignment covers Chapter 10 Material
1. Suppose that the following schedule summarizes the sales (demand) and cost situation confronting an oligopolist:
| Price | $8 | $10 | $12 | $14 | $16 | $17 | $18 | $19 | $20 |
| Quantity Demanded | 9 | 8 | 7 | 6 | 5 | 4 | 3 | 2 | 1 |
| Total Cost | $128 | $110 | $94 | $80 | $68 | $58 | $50 | $44 | $40 |
a.
Graph the
demand, marginal revenue, and marginal cost curves facing the firm in a single
graph.
b.
Identify q*,
the profit-maximizing rate of output, and P*, the profit-maximizing price.
c. What is maximum profit for this firm?