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Assume that if two firms merge, the merged firm will be able to act as an industry leader, making its output decision before the non-merged
Assume that if two firms merge, the merged firm will be able to act as an industry leader, making its output decision before the non-merged firms make theirs. Further assume that y = 0 so that the firms are of equal efficiency. a. Confirm that a merger between firms 1 and 2 will now be profitable
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