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Question: What does it mean to say that a proposed merger will take advantage of available economies of scale? Suppose Eastern Power Co. and Western Power Co. is located at different time zones. Both operate at 60% capacity except for peak periods when they operate at 100% of capacity. The peak periods begin at 9 a.m. and 5 p.m. local time and last about 45 minutes. Explain why a merger between Eastern and Western might make sense. Discuss.

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