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For all problems consider a market containing four identical firms, each of which makes an identical product. The inverse demand for this product is P = 100?Q, where P is price and Q is aggregate output. The production costs for firms 1, 2, and 3 are identical and given by C(qi)= 20qi (i= 1,2,3), where qi is the output of firm i. This means that for each of these firms, variable costs are constant at $20 per unit. The production costs for firm 4 are C(q4)= (20+ ?)q4, where ? is some constant. Note that if ? > 0, then firm 4 is a high-cost firm, while if ? < 0, firm 4 is a low-cost firm (|?| < 20). Note also that Q is the total outputs in the market. Assume that if two firms merge, the merged firm will be able to act as an industry leader, making its output decision before the non-merged firms make theirs. Further assume that ? = 0 so that the firms are of equal efficiency.
1) Confirm that a merger between firms 1 and 2 will now be profitable. What has happened to the profits of the non-merged firms and to the product price as a result of this merger?
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q1.the item to rice or paintings. which product did you expect to have a higher index of intra-industry trade and
When several people have to decide about a single yes/no issue*, the natural decision rule to use is the majority rule. it is possible that the majority's opinion will be accepted on all topics and the minority's opinion will not be accepted on any t..
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A also the new allocation B. Include indifference curves that is consistent with this trade being optimal for both Michael also Tony.
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