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Essay Details:
Essay text:
As a consequence, the downstream output Y will equal the upstream one.
The two market structures taken under examination are a bilateral duopoly and a vertically integrated monopoly.
A bilateral duopoly is a market structure where there are two firms at each stage of production, whereas in a vertically integrated monopoly there is just one firm carrying out both processes.
Throughout the essay it will be assumed that consumer demand in the final market is a linear function of the final output Y and is described by the linear equation:
p=a-bY (a), where a is the consumer reservation price.
The performance, or efficiency, of the two models will be measured by the total ?welfare' they entail...
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