The market for cardboard containers consists of two firms: Composite Box and Fiberboard. As the manager of Composite Box, you enjoy a patented technology that permits your company to produce boxes faster and at a lower cost than Fiberboard. You use this advantage to be the first to choose its profit-maximizing output level in the market. You have estimated the market demand function is Q = 200 - 1/2P. You also know that Composite Box's cost function is C = C(Q(Composite)) = 25Q(Composite) and Fiberboard's cost function is C = C(Q(Fiberboard)) = 100Q(Fiberboard).

a. : Using the information provided, determine the market structure and the level of profits or losses for each firm.

b. : Composite Board is considering buying Fiberboard and producing all the output at its current factory. What would be Composite Board's profits if the purchase took place and how much should it offer Fiberboard to merge?