Market structure where there is monopoly in input market

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Consider a market structure where there is a monopoly in input market (upstream monopolist) and also there is a monopoly in product market (downstream monopoly). If each firm maximizes its profit then there is double mark up. Show that if these two firms integrate then social welfare can be increased, i.e. an integrated monopoly will produce more output then two successive monopolists.

Reference no: EM13981385

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