Upward pricing pressure under capacity constraints, kinked demand and other cases of a constrained pre-merger equilibrium

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Upward pricing pressure formulas for merger analysis (UPP and GUPPI) are adjusted for cases where pre-merger prices correspond to an equilibrium that is constrained in some way, and therefore do not satisfy regular pre-merger first-order conditions. This is the case in particular when pre-merger prices are higher as a result of capacity constraints or a kinked demand curve. The extent of the adjustment to the upward pricing pressure formulas is shown to be given simply by the extent to which pre-merger prices violate the Lerner condition.