(1) Suppose you work for Philippine Competition Commission and you find out that in province A, the only two available hospitals are planning to merge, which would result to a monopoly. If you do not allow for merging, hospital 2 will leave the market. Given the following cost functions and the information provided, would you allow for the merging of the two hospitals? Why or why not? Explain intuitively and mathematically. Hospital 1's cost function = 30+qi Hospital 2's cost function = 40 + 92 Joint cost function = 50+qi+q2

(1) Suppose you work for Philippine Competition Commission and you find out that in province A, the only two available hospitals are planning to merge, which would result to a monopoly. If you do not allow for merging, hospital 2 will leave the market. Given the following cost functions and the information provided, would you allow for the merging of the two hospitals? Why or why not? Explain intuitively and mathematically. Hospital 1's cost function = 30+qi Hospital 2's cost function = 40 + 92 Joint cost function = 50+qi+q2

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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