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The market for a standard-sized cardboard container consists of two firms: CompositeBox and Fiberboard. As the...

The market for a standard-sized cardboard container consists of two firms: CompositeBox and Fiberboard. As the manager of CompositeBox, you enjoy a patented technology that permits your company to produce boxes faster and at a lower cost than Fiberboard. You use this advantage to be the first to choose its profit-maximizing output level in the market. The inverse demand function for boxes is P = 1200 – 6Q,CompositeBox’s costs are CC(QC) = 60QC, and Fiberboard’s costs are CF(QF) = 120QF. Ignoring antitrust considerations, by how much would your profits increase if you merged with Fiberboard?

$

What is the minimum amount you would have to offer Fiberboard for it to accept your purchase offer?

$

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Rahul Sunny answered 2 years ago
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