Manufacturer is a monopolist in selling some product

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Reference no: EM13772630

Suppose that a manufacturer is a monopolist in selling some product to a number of competitive retailers at wholesale price w. The manufacturer has marginal cost of $10 per unit. Each retailer pays w to the manufacturer and charges p for each unit it sells to the consumers. The demand that retailers face in final product market is given by Q = 110 - p.

a. What is the market equilibrium retail price p? What is the profit-maximization wholesale price w for the manufacturer to set? How many units of products will the retailer sell and what will the profit be? Calculate the consumer surplus.

Reference no: EM13772630

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