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Title: Managerial Economics

Essay Details

Subject: Business
Author: Thomas W
Date: October 4, 2012
Level: University
Grade: A
Length: 2 / 350
No of views: 0
Essay rating: good 0, average 0, bad 0 (total score: 0)

Essay text:

No other firm produces this product and no other firm demands this product. It takes one of the upstream product to produce one unit of the downstream product. The upstream firm's total cost (TCU) is TCU = 14 + 10QU + QU2 where QU is the number of units produced by Acme's upstream division. What is the optimal transfer price between the upstream and downstream firms for a unit of the upstream product? How many units are produced? What are the profits of the upstream and the downstream divisions? Suppose that the two firms are located in different countries and that the income tax in the downstream country is 50% and the income tax in the upstream country is 25%...

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The upstream firm's total cost (TCU) is TCU = 14 + 10QU + QU2 where QU is the number of units produced by Acme's upstream division. What is the optimal transfer price between the upstream and downstream firms for a unit of the upstream product? How many units are produced? What are the profits of the upstream and the downstream divisions? Suppose that the two firms are located in different countries and that the income tax in the downstream country is 50% and the income tax in the upstream country is 25%...

Showed next 250 characters

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