Answer the following statements true (T) or false (F)
1) In a successive monopoly structure, if distributor has a constant marginal cost, the wholesale demand curve will lie below the retail marginal revenue curve.
2) Vertical integration is not an economically sound decision in a successive monopoly situation.
3) Vertical integration of a monopoly and a perfectly competitive firm does not yield greater economic profit.
4) If double marginalization exists between an upstream firm and a downstream firm, the vertical integration of the two firms will generate more economic profit.
5) The wholesale demand for a monopoly retailer depends of the retailer's marginal revenue.
1) TRUE
2) FALSE
3) TRUE
4) TRUE
5) TRUE
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