HomogenousConsider a homogenous good industry with four firms.
Total demand is given by D(p)=100-p.
The variable (=marginal) cost of each of the firms is c1=20, c2=40, c3=50 and c4=55. Firms compete in prices.
Suppose firms 1 and 2 merge into one entity and produce with a marginal cost of k>0.
What is the threshold value for k below which the merger increases total welfare? [if applicable, round
Total demand is given by D(p)=100-p.
The variable (=marginal) cost of each of the firms is c1=20, c2=40, c3=50 and c4=55. Firms compete in prices.
Suppose firms 1 and 2 merge into one entity and produce with a marginal cost of k>0.
What is the threshold value for k below which the merger increases total welfare? [if applicable, round