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The total cost equation of the upstream subsidiary firm that produces a critical input for the...

The total cost equation of the upstream subsidiary firm that produces a critical input for the downstream parent company is CU(Qd) = 5(Qd)2. The total cost equation of the downstream subsidiary is Cd(Q) = 10Q. The inverse demand equation for the product of the downstream parent company is P = 150 − Q. How much should the parent company produce when there is no external market for critical input produced by the upstream subsidiary?

  • 14 units.

  • None of the options.

  • 11.67 units.

  • 15 units.

  • 12.5 units.

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