There are 2 firms with differentiated products in a market. The cost of production for each firm is C(q)=20q. Is:

q₁=60-1.5P₁+0.5P₂

q₂=60-1.5P₂+0.5P₁

what's the profit for the firms if p1=p2=36

_{1= 2= ______________}

If the two firms merge, and the two firms keep selling the same products, what will be the profit maximization?

What happens when you derive the first two order conditions?

FOC1:

FOC2:

What is the post-merger price of the two goods after the merger if P1=P2?

(e)Are prices higher before or after the merger? Use one sentence to intuitively explain this finding.

(f)Find the profit of the merged firm after the merger.