Problem 1: Vertical Merger with Cournot Duopolists There are two t-shirt sellers (Seller A and Seller B) outside of Fenway Park. They buy t-shirts from an upstream market where there are two manufacturers (Manufacturer 1 and Manufacturer 2). It costs $2 to manufacture a t-shirt and demand for t-shirts is P(Q) = 400.2Q. The t-shirt seller's only marginal cost is the wholesale cost of the t-shirt. (a) Would consumers be helped or harmed by a merger between Seller A and Manufac- turer 1 if the new merged firm did not supply t-shirts (foreclosed) to Seller B? (b) What is the forclosure effect? In other words, how much worse off is Seller 2 after the vertical merger between Seller 1 and Manufacturer A?