Question
Suppose that the inverse demand for a downstream firm is P = 150 - Q. Its upstream division produces a critical input with costs of
Suppose that the inverse demand for a downstream firm is P = 150 - Q. Its upstream division produces a critical input with costs of CU(Qd) = 5(Qd)2. The downstream firm's cost is Cd(Q) = 10Q. When there is no external market for the downstream firm's critical input, the downstream firm should produce:
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Introduction to Behavioral Economics
Authors: David R. Just
1st edition
0470596228, 978-0470596227
