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Consider a manufacturer that can choose to handle distribution themselves or sell exclusive distribution rights to a retailer for a lump-sum franchise fee. The marginal
Consider a manufacturer that can choose to handle distribution themselves or sell exclusive distribution rights to a retailer for a lump-sum franchise fee. The marginal cost to production and distribution are given by the following equations: MCp - 29 MC. = 10 Finally, inverse-demand in the final market is given by P, - 100 - q If the manufacturer were to sell exclusive distribution rights for a lump-sum franchise fee, what will they charge? (Note: their total cost is given by TC(q) - 25q + 10q) $2304 O. $2944 $1296 $1620
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