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Solve clearly (e) What is the consumer surplus under Monopoly pricing? (f) Would a policy that forces these firms to merge satisfy the Pareto criterion?
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(e) What is the consumer surplus under Monopoly pricing? (f) Would a policy that forces these firms to merge satisfy the Pareto criterion? Explain.5. Suppose that there are two firms competing in the printer market. Each firm has a marginal cost of MC = $50, and the market demand for printers is P - 350 - 10q, - 10q2. (a) What are the best reply functions? (b) What are the Cournot quantities? What is the Cournot price? (c) What is the consumer surplus under the Cournot price? (d) Suppose both firms merged into a monopoly with the same marginal costs. What is the monopolist's price and quantity? Hint: MR = 350 - 20Q, Q = q1 + 92Step by Step Solution
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