According to some economists, horizontal mergers may not always be profitable even though they reduce the number of suppliers. For example, assume a three-firm industry in which the firms behave according to the quantity-setting (Cournot) model. Let market demand be Q = 20 - P. Each firm has a constant average cost of $4. Now assume that a merger reduces the number of firms to two. [Based on VVH Problem 7.7] (a) Calculate the combined profits of the two firms pre-merger, and then calculate the profit of the combined firm in the post-merger situation Cournot duopoly. Would the firms wish to merge? (b) Could these conclusions change if we did not assume the products are homogenous? Explain