2. Suppose that there is a nut manufac- turer N and a bolt manufacturer B. Con- sumers only buy them in pairs, i.e. they would only buy nutbolt pairs. Demand for a pair is g = 14400 200(1),; +105), where n is the price of a nut and 1);, is the price of a bolt. The marginal cost is respectively an and 65. (a) If B sets the price {)5 then what is the best price {In for N to choose? (b) If hypothetically B reduced its price by $1 then how would N change its price? (c) What would be the increase in de- mand? Now suppose that N and B merged and become M. (d) Now suppose that M drops the price of B by $1. Then what would be the increase in demand? (e) Use your findings to explain the role of double marginalization in vertical mergers