16. You are the CEO of Comchip. Each of the firm's computers contain a unique chip that is produced at Comchip's west coast plant at a cost of: TC of wholesaler = Q². Once produced the chips are shipped exclusively to the firm's east coast plant, where the computers are assembled and shipped to the market at a cost of: TC of retailer = 200Q. The demand for Comchip's computers is P = 5000-Q. Determine Comchip's optimal quantity sold, internal 'transfer price and the external price at which it was sold.

16. You are the CEO of Comchip. Each of the firm's computers contain a unique chip that is produced at Comchip's west coast plant at a cost of: TC of wholesaler = Q². Once produced the chips are shipped exclusively to the firm's east coast plant, where the computers are assembled and shipped to the market at a cost of: TC of retailer = 200Q. The demand for Comchip's computers is P = 5000-Q. Determine Comchip's optimal quantity sold, internal 'transfer price and the external price at which it was sold.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.3P

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