Alameda Ltd has two divisions, Division Alpha and Division Beta. Division Alpha makes widgets, which it can
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Alameda Ltd has two divisions, Division Alpha and Division Beta. Division Alpha makes widgets, which it can sell externally for $\$ 45$ as well as internally to Division Beta. The marginal cost of making a widget is $\$ 30$ per unit in Division Alpha, and the division has spare capacity.
Division Beta turns widgets into another product, the bidget, at a marginal cost of $\$ 55$ per unit. Division Beta can then sell bidgets externally for $\$ 120$ per unit. External sales of widgets incur a variable distribution cost of $\$ 3$ per unit:
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