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    net loss from the merger

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    Consider a market that is initially served by two firms, each of which charges a price of $10 and sells 100 units of the good. The long-run average cost of production is constant at $9 per unit. Suppose a merger will increase the price to $14 and reduce the total quantity sold from 200 to 150.
    A. COMPUTE -- What is the consumer surplus [loss] associated with the merger.

    B. COMPUTE -- What was the profit before the merger? after? increase?

    C. How does the consumer loss compare to the increase in profit?

    D. COMPUTE --- What is the net loss from the merger to SOCIETY?

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    https://brainmass.com/economics/microeconomics/129900

    Solution Preview

    A. COMPUTE -- What is the consumer surplus [loss] associated with the merger.
    The decrease in consumer surplus = (old quantity + new quantity)* increase in price / 2
    = (200+150)*(14-10)/2 = 700
    So the consumer surplus loss ...

    Solution Summary

    This posting determines net loss from the merger.

    $2.19