Find whose only market is the downstream division

Reference no: EM13245300

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 of 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?

Reference no: EM13245300

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