Hi! The below question has two sections, I answered question 1 (see answer below question), however I am struggling with section 2, thank you so much for your help!

1 - Economists are often asked to help the Department of Justice evaluate the costs and benefits of mergers. This problem walks you through two rudimentary merger analyses. Consider a market where two firms engage in Cournot competition. They face inverse industry demand curve=251/2. The firms each face a marginal cost of $1.

What is the equilibrium price under Cournot competition? How much does each firm produce?

Answer:

= 16

B= 16

= 9

2 - If the two firms merge, they will act as a monopolist and set a single price^. Find the monopoly price and quantity.

^ =

Q^ =

3 - What is the change in total surplus that results from the merger?

(Use a positive number for an increase and a negative number for a decrease.)

thank you so much!