Suppose That the Inverse Demand for a Downstream Firm Is

question 41

Multiple Choice

Suppose that the inverse demand for a downstream firm is by P = 150 - Q.Its upstream division produces a critical input with costs of C_U(Q_d) = 5(Q_d ) ².The downstream firm's cost is C_d(Q) = 10Q.When there is no external market for the downstream firm's critical input, the marginal revenue for the downstream firm is

• A)MR_d(Q) = 150 - 2Q.
• B)MR_d(Q) = 150 - Q.
• C)MR_d(Q) = 140 - 2Q.
• D)MR_d(Q) = 140 - Q.

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