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Assume a manufacturer can only vertically integrate by merging with a retailer. Does the profit-maximizing price for the integrated firm increase or decrease relative to
Assume a manufacturer can only vertically integrate by merging with a retailer. Does the profit-maximizing price for the integrated firm increase or decrease relative to the retailer's price before integration? Would this be an example of forward integration or backward integration? Based on your predicted price effect, would total surplus increase or decrease in this market? Does the structure of the downstream market change your answer?
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