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Suppose Smart Chips, Banana Computers, Network Software, and IT Max are four firms in an economy. Smart Chips produces 100 chips and sells all the
Suppose Smart Chips, Banana Computers, Network Software, and IT Max are four firms in an economy. Smart Chips produces 100 chips and sells all the chips it produces to Banana Computers at a price of $500 each. Banana Computers produces 100 personal computers with the chips it buys from Smart Chips. Banana sells all the computers it produces to IT Max at a price of $800 each, bundled with software that Banana licenses from Network Software at a price of $50 per computer. IT Max then sells the computers to the consumers in the economy for $1,000 each
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