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Does the merger lead to a higher or a lower cournot

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Suppose that P = 400 - 20Q and that there are 3 firms, each with a marginal cost of 30. Suppose that firms 2 and 3 merge. The merger allows the combined firm to lower its marginal cost to 20. Does the merger lead to a higher or a lower cournot equilibrium price?

Reference no: EM13338143

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