The figure given below represents the total output and price produced in an oligopoly market characterized by a dominant firm and a fringe.SF represents the supply curve of the fringe, D is the market demand curve, DRES represents the residual demand curve of the dominant firm, MRRES represents the residual marginal revenue curve of the dominant firm, and MCD represents the marginal cost of the dominant firm.
-Refer to Figure .What will be the dominant firm's profit maximizing output?
Definitions:
Price Leadership
A strategy where the dominant firm in a market sets the price of goods or services, and other competitors in the market follow suit.
Automobiles
Motor vehicles designed for transporting passengers on roads.
Oil
A natural fossil fuel used primarily for energy production and as a raw material in manufacturing.
Banking
The business activity of accepting and safeguarding money owned by individuals and entities, and then lending out this money to earn a profit.
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