"In the model of a dominant firm, assume that the fringe supply curve is Q = -1 + 0.2P, where P is market price and Q is output. Demand curve is given by Q = 11 - P."
What will price and output be if there is no dominant firm? Now assume that ther is a dominant firm, whose marginal cost is constant at $6. Derive the residual demand curve that it faces and calculate its profit-maximizing output and price.