A monopolist retailer faces a demand = 12- , where is the number of units demanded at price . For each unit it sells, the retailer incurs a retail cost of 2 and pays a wholesale price to a monopolist manufacturer. The monopolist manufacturer, who sets the wholesale price , incurs a marginal production cost of 2.

5) Suppose the retailer and the manufacturer act as non-integrated firms. Determine the profit maximizing retail price set by the retailer.

6) Suppose the retailer and the manufacturer act as vertically integrated firms. Determine the profit maximizing retail price set by the retailer.