So I´m a bit stuck on this one. There are two firms in the country that sell cars. Both sell Toyotas and they buy their cars directly from the manufacturer, which is Toyota. We can assume that quantity is the strategic variable, and that the two car dealers have no other marginal costs than the wholesale price "r".
The inverse total demand: P = 1500 - 5(q1 + q2)
MC = 30
And I got:
q1 + q2 = Q
Q = 2(1500-r)/(2+1)5 = (3000-2r)/15
Which wholesale price, r, will the Toyota set? What is the equilibrium retail price, p, and the number of units sold?
When I solve for "r" I get:
r = 1500 - 7.5Q
But after this I am stuck and I can´t figure out what to do next. Anyone with any suggestions on how I should proceed or point me in the right direction?