6 Suppose there are two separate firms. The upstream firm is the only producer of an input...

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6 Suppose there are two separate firms. The upstream firm is the only producer of an input required by the downstream firm and the upstream firm has no other customers. One unit of input at the downstream firm is required to produce one unit of output at the downstream firm. The cost functions for the two firms are:

where U and D stand for the upstream and downstream firms, respectively. The inverse demand for output produced by the downstream firm is given by:

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Essentials Of Business Communication

ISBN: 9780176721244

9th Canadian Edition

Authors: Richard Almonte, Mary Guffey, Dana Loewy

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