Abstract
The simultaneous production of dierent outputs (co-products) is observed in the chemical, material, mineral, and semiconductor industries among others. Often, as with microprocessors, the outputs dier in quality in the vertical sense and rms classify the output into dierent grades (products). We analyze product-line design and production for a rm operating a vertical co-product technology. We examine how the product line and prot are inuenced by the production cost and output distribution of the technology. We prove that production cost inuences product line design in a fundamentally dierent manner for co-product technologies
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