Suppose firms 1 and 2 would like to merge and constitute firm = 1 ⊕ 2.1 According to the Hart-Scott-Rodino Act (Clayton \S 7a) the proposed merger is substantial and therefore must submit information to the Federal Trade Commission. Upon initial discovery, the FTC realized products were heterogeneous but somewhat substitutable, making market-definition and any market-share based analysis rather difficult, potentially under-estimating competitive effects of set merger. The FTC then decided to approach the analysis using UPP, a technique recently added to the antitrust methodology.2
Use the UPP to predict post-merger prices.
What is the newly merged firm's first order condition?