16. You are the CEO of Comchip. Each of the firm's computers contain a unique chip that is produced at Comchip's west coast plant at a cost of: TC of wholesaler = Q². Once produced the chips are shipped exclusively to the firm's east coast plant, where the computers are assembled and shipped to the market at a cost of: TC of retailer = 200Q. The demand for Comchip's computers is P = 5000-Q. Determine Comchip's optimal quantity sold, internal 'transfer price and the external price at which it was sold.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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16. You are the CEO of Comchip. Each of the firm's computers contain a unique chip that is produced at Comchip's
west coast plant at a cost of: TC of wholesaler = Q². Once produced the chips are shipped exclusively to the firm's
east coast plant, where the computers are assembled and shipped to the market at a cost of: TC of retailer = 200Q.
The demand for Comchip's computers is P = 5000-Q. Determine Comchip's optimal quantity sold, internal
'transfer price and the external price at which it was sold.
Transcribed Image Text:16. You are the CEO of Comchip. Each of the firm's computers contain a unique chip that is produced at Comchip's west coast plant at a cost of: TC of wholesaler = Q². Once produced the chips are shipped exclusively to the firm's east coast plant, where the computers are assembled and shipped to the market at a cost of: TC of retailer = 200Q. The demand for Comchip's computers is P = 5000-Q. Determine Comchip's optimal quantity sold, internal 'transfer price and the external price at which it was sold.
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