Suppose there is a manufacturer selling a single product to retail firms. The cost of production for the good is c = $1. When the retail firms are separately owned, the upstream firm (manufacturer) sets a single wholesale price, w. Assume also that the downstream firms face an extra cost of $2 for packaging. The demand in the downstream market is P = 11-91-92, where P is the price charged to the final end-user, and 91, 92 denote the production levels (quantities) of the retail firms. A. (a) Solve for the optimal retail quantities. (b) Find the optimal wholesale price. (c) Compute the profits for the manufacturer and the retailers. B. (a) The manufacturer acquired both retailers in a vertical merger. Calculate the optimal retail price (P) and quantity on the market for the merged firm. Find also the merged firm's profit. (b) Compare the total industry profits in parts B.a. and A.c. C. Suppose that the upstream firm merges with Retailer 1, and Retailer 2 purchases the good at the wholesale price w = $3 from the merged firm. Assume also that the cost of packaging is zero. Find the optimal production levels and the optimal profits.

Suppose there is a manufacturer selling a single product to retail firms. The cost of production for the good is c = $1. When the retail firms are separately owned, the upstream firm (manufacturer) sets a single wholesale price, w. Assume also that the downstream firms face an extra cost of $2 for packaging. The demand in the downstream market is P = 11-91-92, where P is the price charged to the final end-user, and 91, 92 denote the production levels (quantities) of the retail firms. A. (a) Solve for the optimal retail quantities. (b) Find the optimal wholesale price. (c) Compute the profits for the manufacturer and the retailers. B. (a) The manufacturer acquired both retailers in a vertical merger. Calculate the optimal retail price (P) and quantity on the market for the merged firm. Find also the merged firm's profit. (b) Compare the total industry profits in parts B.a. and A.c. C. Suppose that the upstream firm merges with Retailer 1, and Retailer 2 purchases the good at the wholesale price w = $3 from the merged firm. Assume also that the cost of packaging is zero. Find the optimal production levels and the optimal profits.

Elementary Geometry For College Students, 7e

7th Edition

ISBN:9781337614085

Author:Alexander, Daniel C.; Koeberlein, Geralyn M.

Publisher:Alexander, Daniel C.; Koeberlein, Geralyn M.

Chapter8: Areas Of Polygons And Circles

Section8.5: More Area Relationships In The Circle

Problem 30E: At the Pizza Dude restaurant, a 12-in. pizza costs 5.40 to make, and the manager wants to make at...

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