Question
A firm's upstream division produces a component for its downstream division which manufactures the final product widgets (the MP1of this intermediate good is 1). The
A firm's upstream division produces a component for its downstream division which manufactures the final product widgets (the MP1of this intermediate good is 1). The TC function forthe upstream division is TC1= Q12and the total cost function for the downstream division is TCd=20Q. The firm's demand curve for widgets is P = 220-Q. Q1is quantity of intermediate good and Q is quantity of final product.
In the case with no outside market for the intermediate good, Q1producedequals ? Answer:
Q1 usedequals? Answer:
And the optimal transfer price is $
A firm's upstream division produces a component for its downstream division which manufactures the final product widgets (the MP1 of this intermediate good is 1). The TC function for the upstream division is TC1 = Q12 and the total cost function for the downstream division is TCd =20Q. The firm's demand curve for widgets is P = 2200. Q1 is quantity of intermediate good and Q is quantity of final product. In the case with no outside market for the intermediate good, Q1rproduced equals D, Q1! used equals [3 and the optimal transfer price is 55:] Step by Step Solution
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Austro-corporatism Past, Present, Future
Authors: Gunter Bischof
1st Edition
1000675858, 9781000675856
