Suppose that a monopoly steel producer produces steel at zero marginal costs and sells to a monopoly automaker at a price Psteel. The automaker has no costs other than the cost of steel, which is converted into cars at the rate of one ton of steel to one car. There is no other way to produce a car than to use a ton of steel. The demand for cars is given by Qcars = 100 − Pcars.

a. For a given price of steel, what quantity of cars will the automaker produce in order to maximize profits?

b. What is the equation for the automaker's demand curve for steel?

c. How much steel is produced? At what price? How many cars are produced? At what price?

d. If the steel producer acquires ownership of the automaker, how many cars are produced? At what price?