The current MC is the blue MC, or "e". The duopolists produce, in total, the output level that corresponds to point "I". The SS under a duopoly is equal to Oa. atitvte Ob. atg+t+e Oc. ath+ute O d. h+u+j If the duopolists merge to become a monopolist, the firms can pool their resources and expertise. As a result, the merged firm, which is the newly formed monopolist, will enjoy economies of scale, or a decrease in MC. This new monopolist faces the new pink MC, or "f. This new monopolist produces the output level that corresponds to point "m". The SS under this merged and more cost efficient firm is Compared to the case in which there were two firms and MC = e, consumer surplus after this merger. Oa. ath+ q+ f; falls O b. ath+ q + f; may rise or fall Oc. atitr+f; rise O d. atitr+ f; may rise or fallQuestions #4, #5, #6 and #7 are related to Figure 3 below: W C V MC MC' + MR Demand n m Figure 3: Merger and Regulations - Duopoly and Merger with EOS The current MC is the blue MC, or "e". The perfectly competitive firms produce, in total, the output level that corresponds to point "k". The SS under perfect competition is equal to Oa. ate+j Ob. a+d+i O c. a+b+g O d. atcth The current MC is the blue MC, or "e". The monopolist produces the output level that corresponds to point "n". The SS under a monopoly is equal to Oa. atg+t+e Ob. atitvte Oc. ath+ute Od. itv+j