Multiple Choice
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 marginal revenue for the downstream firm is:
A) MRd(Q) = 150 − 2Q.
B) MRd(Q) = 150 − Q.
C) MRd(Q) = 140 − 2Q.
D) MRd(Q) = 140 − Q.
Correct Answer:
Verified
Correct Answer:
Verified
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