Suppose the upstream firm is the wholesaler/manufacturer and the downstream firm is the retailer/store. Each firm is the monopolist in its production stage. The following information is given:

Retailer's demand: Q = 200 - PR

Retailer's MC: MCR= ATCR= PW, the price the wholesaler charges the retailer. For simplicity, the retailer has no other MCs.

Wholesaler'sMCW=ATCW= 40

The wholesaler's profit is equal to _____ and the retailer's profit is equal to ______.

a.

$1,600; $400

b.

$3,200; $1,600

c.

$6,400; $3,750

d.

None of the answers above is correct.