Two firms have been competing on quantity in a duopoly for the past ten years. Entry costs are sufficiently high in the market so that there is no threat of other firms entering the market. The firms have identical costs of 2 per unit produced and face a market demand curve of P = 100 - 10(q1 + q2), where qi is firm i's quantity.

-What is the equilibrium price, quantity and profit for each firm

After so many years of competition, the two firms are considering a merger. Leadership of the two firms believes that merging will have no implications for marginal costs.

-What price and quantity would the merged firm set? Is it profitable for the two firms to merge