Price leader in the mobile phone market

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Reference no: EM13981926

Apple feels it is a price leader in the mobile phone market with all the other producers acting as followers. The total demand for mobile phones is given as,

P=22,500--5Q(T)

Apple’s Marginal cost function for their mobile phone is,

MC(L)= 4,450+4.25Q(L)

The overall marginal cost function for the non leaders is

MC(F)= 2,150+ 4.5Q(F)

A. If Apple wants to maximize profits, how many mobile phone units should they produce? How much should they charge?

B. What is the total amount of mobile phones demanded in the market at the price Apple set in the previous question? How many do the followers supply?

Reference no: EM13981926

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