A Large Firm That Is a Price Leader in an Industry

question 20

Multiple Choice

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 = 28,700 - 75P, where Q_m is units per month.
It expects small firms in the industry to supply output according to the following function: Q_s = 1,700 + 25P. What quantity and price will the large firm set?

• A) Q = 1,350, P = 135
• B) Q = 1,435, P = 143.5
• C) Q = 1,350, P = 67.5
• D) Q = 1,435, P = 71.75
• E) None of the above

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Definitions:

Embryonic

Relating to the earliest stages of development in living organisms before birth or hatching.

Implantation

Attachment of the blastocyst to the endometrium of the uterus, occurring 6 or 7 days after fertilization of the ovum.

Human Embryo

An early developmental stage of human growth and differentiation, starting from fertilization to the eighth week, where major organs and structures begin to form.

Blastocyst

Stage of mammalian embryos that consists of the inner cell mass and a thin trophoblast layer enclosing the blastocele.