Suppose Affiliate a Sells 10,000 Chips Monthly to Affiliate B

Suppose affiliate A sells 10,000 chips monthly to affiliate B at a unit price of $1A's tax rate is 45% and B's tax rate is 55%. In addition, B must pay an ad valorem tariff of 12% on its imports. If the transfer price on chips can be set anywhere between $11 and $18, how much can the total monthly cash flow of A and B be increased by switching to the optimal transfer price?

A) $3,000
B) $4,000
C) $1,840
D) $1,380