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The diagram below describes the market for natural gas in New Eealand. Price [$] 20 115 ll] [1.2 0.25 0.4 I15 115 Quantityr {million units]
The diagram below describes the market for natural gas in New Eealand. Price [$] 20 115 ll] [1.2 0.25 0.4 I15 115 Quantityr {million units] 2. Assume the market for natural gas in New Zealand is currently perfectly competitive and the supplier's marginal costs of production are shown by the supply curve 5. The Commerce Commission has been asked to consider allowing a merger of the existing rms into a single monopoly supplier of natural gas. This monopoly rm would have signicantly lower marginal costs of production illustrated by the new marginal cost curve MSC'. Calculate the size of the components of total welfare with and wiaout the merger. Would the Commerce Commission agree to this merger? Why, or whyr not
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