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You are asked to perform a merger simulation. Suppose inverse demand is P=360-Q. a) There are three firms in the industry: A,

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classmate Date 2 c = 360-1360-QB QC -QB 2 P = 360-8. 8 = QAT QB+Qc p= 360-(Q At Q B t Qc) for from A. _TRA = P QA = (360-QA-Qclassmate with duopoly Date Page on = 120 QA =120 If both merge market duopoly a las P = 360-/GA TOB) P = 300-QA - QB P = 360Please see the above picture attached .With three firms ,Quantity produced by each firm=90 and price charged=90

But with mergers ,only two firms ,Quantity charged by each firm=120 and price charged=120.

DOJ is concerned with price increses, which is 33.33% and thus oppose the merger.

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