A Large Firm That Is a Price Leader in an Industry

question 30

True/False

A large firm that is a price leader in an industry characterized also by many small competing firms estimates that the market demand for its product to be as follows: Q_m = 40,700 - 100P, where Q_m is units per month.
It expects small firms in the industry to supply output according to the following function: Q_s = 700 + 25P.
The demand function for the large firm is Q_L = 40,000 - 125P.

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Definitions:

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