2.14 All the firms in a competitive industry have the same constant marginal cost. All the firms...

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2.14 All the firms in a competitive industry have the same constant marginal cost. All the firms merge into a single firm.

a. If the merged firm’s marginal cost does not change, what happens to total surplus? (Hint:

You may be able to answer this question without having to use a formal analysis.)

b. Use a graph to show that if the merged firm’s marginal cost falls, total surplus may rise.

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Related Book For book-img-for-question

Managerial Economics And Strategy

ISBN: 9780135640944

2nd Global Edition

Authors: Jeffrey M. Perloff, James A. Brander

Question Posted: Oct 08, 2024 06:03 AM

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2.14 All the firms in a competitive industry have the same constant marginal cost. All the firms...

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Managerial Economics And Strategy

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