Furniture Manufacturer Sells Its Product Directly to Consumers Directly and to Retailers

Essay

Furniture manufacturer sells its product directly to consumers directly and to retailers of furniture. The demand functions of the two types of customers and the total cost function of the furniture company are given below.
$$\text { Direct consumers: } Q _ { 1 } = 110 - 10 P _ { 1 }$$ $$\text { Retailers: } Q _ { 2 } = 120 - 10 P _ { 2 }$$ $$T C = 20 + 10 Q$$ What is the optimal level of output and how should the firm distribute its sales?