The Locust Corporation is composed of a marketing division and a production division. The marginal cost of

Question:

The Locust is composed of a marketing division and a production division. The marginal cost of producing a unit of the firm's product is $10 per unit, and the marginal cost of marketing it is $4 per unit. The demand curve for the firm's product is
P = 100 - 0.01Q
where P is the price per unit (in dollars) and Q is output (in units). There is no external market for the good made by the production division.
a. How should managers set the optimal output?
b. What price should managers charge?
c. How much should the production division manager charge his counterpart in marketing for each unit of the product?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...