1 League Competition Suppose the NFL and the AFL are competing against one another. They compete by choosing the total number of games to play within their league. The demand for games is given by: P(Q) = 2000 - 3Q where Q is the total number of games played and P is the price the leagues would receive for each game (in thousands). You can think of the price as the price of tickets per game and/or the price of broadcast rights per game. The cost of each league to put on a game is MC = 200 (i.e., 200 thousand). 1. First assume the leagues compete with one another so that they compete as though they are in a perfectly competitive market. (a) What is the total number of games played in equilibrium? (b) What is the equilibrium price per game? (c) What are total profits across the two leagues? (d) What is total consumer surplus across the two leagues? 2. Now suppose the leagues merge to form 1 league (so they are a monopoly). (a) What is the total number of games played in equilibrium? (b) What is the equilibrium price per game? (c) What are total profits across the two leagues? (d) What is total consumer surplus across the two leagues? 3. Now suppose that the merger results in both cost and demand efficiencies. Specifically, the marginal cost goes down to MC = 150 because of a reduction in travel and the demand increases to P(Q) = 2250 - 3Q (a) What is the total number of games played in equilibrium? (b) What is the equilibrium price per game? (c) What are total profits across the two leagues? (d) What is total consumer surplus across the two leagues