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Finally, mix-and-match composite goods have increased their price.
Each firm is setting one part of the composite good price for (n) different composite goods.
The remaining ( (n-1 times n-1 timesmposite goods are totally controlled by outsiders.
When (n=2,) the no compatibility case reduces the number of composite goods by two.
There are not now mix-and-match composite goods that push profits upwards.
Then, consider an industry of composite goods formed by two components, (A) and (B).
Components' compatibility results in (ntimes n) composite goods in the market.
In this way, the merger controls one component in (2n) composite goods, increasing its market power.
As noted above (n^{2}) composite goods can be assembled when components are fully compatible.
Utility derived from the consumption of domestic composite goods is maximized.
As (frac{gamma }{beta } ) increases, composite goods are less differentiated and competition is more intense.
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