Vegemite is an inexplicable Australian delicacy produced by Mondelez International. Sold in jars, its primary ingredient is used brewer's yeast. While other firms produce similar products, these are generally regarded as poor substitutes for real Vegemite; consequently, we can regard Mondelez as a monopolist in the market for Vegemite. Currently, Mondelez sells Vegemite for a price of AUS $1.90 for a 100g jar. Annual sales are approximately 22 million jars per year. You are a consultant for BCG, retained by Unilever to investigate the profitability of acquiring Mondelez's Vegemite business. You estimate Mondelez's marginal cost of producing Vegemite to be AUS $1.25 per jar. While you don't know the elasticity of demand for Vegemite, you do know that Mondelez hired a superb team of consultants, headed by a former Stuart School classmate, to analyze and optimize its pricing. a) What is your best estimate of the elasticity of demand for Vegemite at its current price? b) What is Vegemite's annual profit contribution for Mondelez? Assume that the fixed costs of Vegemite production are $4.4 million, or $0.20 per jar. c) Your team at BCG (Boston Consulting Group) estimates that Unilever's superior supply chain management can reduce the marginal cost of production to AUS $1.10 per jar. If the takeover bid is successful, should Unilever raise or lower the price of Vegemite, or keep it at $1.90? Explain