5. Gibson is an electric guitar manufacturer. Knowing its critical importance in the overall I:|ualiti,.r of a guitar, Gibson also produces the strings that are used in its guitars. Gibson estimates the marl-Let demand for its electric guitars as follows: FILMDill In this equation, [1 denotes the electric guitars sold per month and P is the price of the guitars. Gibson also estimates its total cost as follows: Tc-mwmoq-Tcm In this equation, TC5-_- -.,,._ denotes the firm's total cost of producing the guitar strings. Currently, Gibson estimates the total cost of producing strings as follows: Trini- 1m In other words, lGibson's total cost per unit of strings is El. Gibson uses one unit of strings per guitar. 3. Assume that lGibson's strings are designed to be used only for its own brand of guitars; in other words. there is no external market for the strings. Determlne the profit-maximizing number of guitars Gibson should produce and sell. Explicitlystatethe transfer price that Gibson should setfor the strings. b. Cine of ISuibso n's competitors has approached Gibson with an offer to buy strings to use in the manufacturing of their own guitars. The competitor has offered to buy ECHO units of strings and paw,r 51m per unit. Gibson's current maximum production capacity is SLIDE units of strings. In light of this new information, determine the new optimal transfer price for strings. L DE'IIEI'H'IHE whether 1,rour answer in part [bl would be different if Gibson's total cost of producing the strings is estimated as follows: Tau-Wanna... Continue to assume that Gibson can buy or sell strings at the EEGD market price