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5. (6 pts.) The Rockets Co. and the Warriors Co. are both subsidiary companies owned by the NBA Jam Co. The Rockets Co. makes
5. (6 pts.) The Rockets Co. and the Warriors Co. are both subsidiary companies owned by the NBA Jam Co. The Rockets Co. makes a product called the "Brick" with a variable cost per unit of $9 and total fixed expenses of $400,000. The Rockets Co. can sell the product to other companies for $18. The Rockets Co. has a capacity of 10,000 units, but is currently selling 9,000 units to outside companies (thus, there is idle capacity of 1,000 units). The Warriors Co. uses the Brick in one of its products called the "Championship". The Warriors Co. can buy the "Brick" from an outside company for $16 per unit. If the Warriors Co. needs 2,000 units of the "Brick", what would be the range of acceptable transfer prices between the Rockets Co. and the Warriors Co.?
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