1. In Lecture 22: Mergers 2, we ran through a simple version of Williamson's (1968) model of a merger to identify the key welfare trade-off. On slide 15, I leave as an exercise to re-do that analysis using Cournot duopolists instead of Bertrand duopolists. That is, there are two identical firms with identical products competing a la Cournot. They merge, and the resulting monopoly has lower marginal costs and greater market power. What is the net change in welfare? Use the numbers used in the lecture to do this problem. That is, let inverse market demand be given by P=205Q, and let marginal cost be constant at 4 per unit for the duopolists. Let =0.5, such that the resulting monopoly has marginal cost of 2 per unit. 1. In Lecture 22: Mergers 2, we ran through a simple version of Williamson's (1968) model of a merger to identify the key welfare trade-off. On slide 15, I leave as an exercise to re-do that analysis using Cournot duopolists instead of Bertrand duopolists. That is, there are two identical firms with identical products competing a la Cournot. They merge, and the resulting monopoly has lower marginal costs and greater market power. What is the net change in welfare? Use the numbers used in the lecture to do this problem. That is, let inverse market demand be given by P=205Q, and let marginal cost be constant at 4 per unit for the duopolists. Let =0.5, such that the resulting monopoly has marginal cost of 2 per unit