Consider a supply chain consisting of a heavy machine mfr., itspart supplier, its dealer, and the customer. The mfr. producescustomized machine and uses the dealer to sell to the customer.Suppose the customer’s reservation price of the machine is$300,000. The retail price is $250,000. The wholesale price betweenthe mfr. and the dealer is $200,000. The dealer’s other retailrelated cost is $20,000. To produce the machine, the mfr. spends$50,000 as the production cost and pays the supplier $40,000 to buythe parts needed. The parts are not customized and the supplier’sproduction cost is $10,000. What is the supply chain surplus andwhat is the
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