How does the merger affect markups and profits?.
Two physical therapy firms want to merge. The price elasticity of demand for physical therapy is -0. Show more Two physical therapy firms want to merge. The price elasticity of demand for physical therapy is -0.40. Firm A has a volume of 10400 fixed costs of $50000 marginal costs of $20 and a market share of 8%. Firm B has a volume of 15600 fixed costs of $60000 marginal costs of $20 and a market share of 12%. The merged firm has a volume of 26000 fixed costs of $100000 marginal costs of $20 and a market share of 20%. a. What are the total costs prices revenues and profits for each firm and for he merged firm? b. How does the merger affect markups and profits? Show less
How does the merger affect markups and profits?
