Two firms A and B produce a product jointly. The total value to the two firms from the joint venture is given by V = ViA + Vis where iA and is are the firms' respective investment levels. When investing iA (iB) the firm pays a cost equal to -iA (-iB). After the investment levels have been chosen, the firms divide V equally. a) Determine the Nash equilibrium investment levels, and the consequent payoffs for each firm. b) Suppose that A and B merge. Determine the optimal investment levels and the payoffs for the merged firm. Do the firms benefit from the merger? Why or why not