The Theory of Imperfect Competition A particular equation for the demand facing a firm that has these properties is Q=SX[1/m-b×(P-P) (6-5) where O is the firms sales S is the total sales of the industry n is the number of firms in the industry b is a constant term representing the responsiveness of a firm's sales to its price P is the price charged by the firm itself -p is the average price charged by its competitors Copyright C 2003 Pearson Education, Inc Slide 6-19Copyright © 2003 Pearson Education, Inc. Slide 6-19 where: – Q is the firm’s sales – S is the total sales of the industry – n is the number of firms in the industry – b is a constant term representing the responsiveness of a firm’s sales to its price – P is the price charged by the firm itself –A particular equation for the demand facing a firm that has these properties is: Q = S x [1/n – b x (P – P)] (6-5) The Theory of Imperfect Competition –P is the average price charged by its competitors