Assume as in the example in the text that c = 5 while y(s) = s², so that p/(s) = 2s. Assume that the manufacturer sells through a monopoly retailer and initially sets a wholesale price, r equal to $6. Assume that retail demand is Q(p, s) = s(10 - p) 100. a. What will be the retail service level and the retail price? How much output will be sold at this price and service level combination? What will be the manufacturer's profit? Compare the manufacturer's profit at r = $6 rise with its value at r = $7. What does this increase in r do to the level of retail services? b.

Assume as in the example in the text that c = 5 while y(s) = s², so that p/(s) = 2s. Assume that the manufacturer sells through a monopoly retailer and initially sets a wholesale price, r equal to $6. Assume that retail demand is Q(p, s) = s(10 - p) 100. a. What will be the retail service level and the retail price? How much output will be sold at this price and service level combination? What will be the manufacturer's profit? Compare the manufacturer's profit at r = $6 rise with its value at r = $7. What does this increase in r do to the level of retail services? b.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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