Price Leadership. Biking Magazine is a dominant price leading firm in the popular bicycle magazine market. Wheel Deal and Free Wheel are competing magazines that address the same audience. Total and marginal cost relations for each magazine are:

and the industry demand curve is:

Assume throughout this problem that Wheel Deal and Free Wheel are perfect substitutes for Biking magazine.

Question

Price Leadership. Biking Magazine is a dominant price leading firm in the popular bicycle magazine market. Wheel Deal and Free Wheel are competing magazines that address the same audience. Total and marginal cost relations for each magazine are:
 
 and the industry demand curve is:
  
Assume throughout this problem that Wheel Deal and Free Wheel are perfect substitutes for Biking magazine.

Quizplus · Accepted Answer

The Answer of Price Leadership. Biking Magazine is a dominant price leading firm in the popular bicycle magazine market. Wheel Deal and Free Wheel are competing magazines that address the same audience. Total and marginal cost relations for each magazine are:
 
 and the industry demand curve is:
  
Assume throughout this problem that Wheel Deal and Free Wheel are perfect substitutes for Biking magazine.