Author Question: Vertical contracts aim to a. Incentivize the manufacturers to undertake costly activities, which ... (Read 22 times)

karateprodigy · **on:** Jul 1, 2018

Vertical contracts aim to
a. Incentivize the manufacturers to undertake costly activities, which they may not realize the full benefits of on their own
b. Incentivize the retailers to undertake costly activities, which they may not realize the full benefits of on their own
c. Incentivize the retailer and the manufacturer to undertake activities that reduce profits for the supply chain
d. Both A&B

Question 2

Firm A producing one good acquires another firm B producing another good. Price elasticity of demand for Firm A's good is -1.8 and Firm's B is -1.8 . Holding other things constant and assuming both goods are substitutes, the acquiring firm should
a. Raise prices on both goods with a larger increase in Firm A's good
b. Raise prices on both goods with a larger increase in Firm B's good
c. Raise prices on both goods by the same amount
d. Lower prices on both goods