Question

Price Leadership. Leading People Magazine is a dominant price leading firm in the popular celebrity news magazine market. Moonlighting and National Inquest are competing news magazines that address the same audience. Total and marginal cost relations for each magazine are: Leading People TCL = 12,500 - 1QL + 0.000005QL2 MCL = ?TCL/?QL = -1 + 0.00001QL Moonlighting TCM = 10,000 + 0.5QM + 0.00005QM2 MCM = ?TCM/?QM = 0.5 + 0.0001QM National Inquest TCN = 50,000 + 1.25QN + 0.000025QN2 MCN = ?TCN/?QN = 1.25 + 0.00005QN and the industry demand curve is: QD = 170,000 - 20,000P Assume throughout this problem that Moonlighting and National Inquest are perfect substitutes for Leading People magazine. Calculate optimal supply for A)Moonlighting B)National Inquest

Answer 1