Recovering the Acquisition Cost. In a regulated monopoly using average cost? pricing, the? long-run average cost of production is constant at ?$12 per unit. Suppose firm X acquires Y at a cost of ?$24 million and increases the price to ?$8. At the new? price, X sells 2 million units per year.
a. The acquisition causes? X's annual profit to (increase, decrease, or stay the same) by ?$ million ?(enter your response as an ?integer).
b. How many years will it take for X to recover the cost of acquiring? Y?