Consider a homogenous good industry with four rms. Total demand is given by D(p)=200-p. The variable (=marginal) cost of each of the rms is c1 =1 0, c2=20, c3=30 and c4=35. Firms compete in prices. Suppose rms 1 and 2 merge into one entity and produce with a marginal cost of'lS. Which of the following statements is correct? 0 After the merger, total welfare increases by $500. 0 After the merger, total welfare decreases by $500. 0 After the merger, total welfare increases by $1000 0 After the merger, total welfare decreases by $1000. 0 None of the above