TinCow is right, a depleted unit costs the same as a full unit, which sort of encourages you NOT to merge experinced unit.
Furthermore, for repression purposes, a unit is a unit, whether it has 35 men or 120. Early game I like to keep depleted, experienced units as garrison while I move the full units forward to fight. Don't forget that unit replenishment are one of the biggest reasons to take road upgrades early (in addition to helping town growth)
I only merged in times of emergency when I was either broke, or a partial unit was not viable (like defending a castle)
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