Determine algebraically the profit-maximizing outputs

Reference no: EM13207323

The external demand and marginal cost functions of the marketing divisions of the firm are, respectively:

Qm = 160-10Pm or Pm=16-0.1Qm and MR=16-0.2Qm

The marginal cost functions of the production and marketing divisions of the firm are, respectively:
MCp'=2-0.1Qp and MCm=1+0.1Q

A perfectly competitive market exists for the intermediate product at P=$6.

Determine algebraically the profit-maximizing outputs for the production and marketing divisions of the firm and the optimal transfer price for the intermediate product and the price of the final product.

Reference no: EM13207323

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