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There is a single manufacturer with marginal cost of 3 and a single distributor with marginal cost of 1. Both manufacturer and distributor are monopolies.
There is a single manufacturer with marginal cost of 3 and a single distributor with marginal cost of 1. Both manufacturer and distributor are monopolies. The distributor faces a demand curve of ()=12.
Suppose that the manufacturer and distributor vertically integrated into a single firm (but costs are unchanged). What price will be charged for the final good and what quantity will be sold?
what is the total profit, and what is the consumer surplus?
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