Apple sold its iPhone to AT&T, which in turn sold it to the final consumers. Suppose that the consumers’ constant elasticity demand function for the iPhone was Q = Ap-ε , Apple’s marginal cost of production was m, and AT&T’s marginal cost of reselling the phone was c. If both Apple and AT&T were monopolies and set prices independently, what price would they set? If they were to have merged, what price would they have set?