Merlin is like all other managers in a perfectly competitive industry except in one respect:

Because of his great sense of humor, people are willing to work for him for half the going wage rate. All other firms in the industry have short-run total cost curves given by

(see footnote 16), where M is the salary paid to ordinary managers and w is the going wage rate for the industry. If all firms in the industry face an output price of 28, and if w 2, how much more will Merlin be paid than the other managers in the industry?