Homework Answers
Market demand is given by 2Q = 100 - P or Q = 50 -0.5P.
Supply curve of fringe is Q = 0.5P
Hence residual demand is RD(P) = 50 - 0.5P - 0.5P or Q = 50 - P
Residual demand in inverse form is P = 50 - Q
Marginal revenue from this residual demand is MR = 50 - 2Q (it has same intercept but twice the slope)
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