Posted by **Kathy** on Wednesday, June 15, 2011 at 6:58pm.

A large firm has two divisions: an upstream division that is a monopoly supplier of an input whose only market is the downstream division that produces the final output. To produce one unit the final output, the downstream division requires one unit of the input. If the inverse demand for the final output is P = 1,000 -80Q, would the company's value be maximized by paying upstream and downstream divisional managers a percentage of their divisional profits? Explain.

## Answer This Question

## Related Questions

- Transfer Pricing - The per unit cost details are as followers: Machining ...
- Economics - A monopoly produces widgets at a marginal cost of $8 per unit and ...
- Economics - Two firms produce the same good and compete against each other in a ...
- economics - The graph on the left shows the short-run marginal cost curve for a ...
- economics - 5. A market contains a group of identical price-taking firms. Each ...
- math - Smith and Jones has two separate divisions. Division X produces custom ...
- Math/Economics - Suppose that a firm has only one variable input, labor, and ...
- Math/Economics - Suppose that a firm has only one variable input, labor, and ...
- Quantitative analysis - Input Output Model The Xavier Corporation has a digital ...
- economics - monopoly/monopsony - just a quick qusetion....if a firm is both a ...

More Related Questions