1. Suppose a merchant buys X pieces and Y pieces of this commodity from A and B respectively.

Then x+y = (210+700+340)/25,210/x-700/y = 3.5.

X= 10, y=40.

2. The profit for two months is 2*(625-500)=250 yuan.

Suppose the cost price of this product is reduced by X every month on average.

500-500 *( 1-x)+500 *( 1+6%)-500 *( 1-x)*( 1-x)= 250

The solution is x= 15.46%.