Look again at the section The Department of Justice and FTC Merger Guidelines and the Herfindahl-Hirschman Index

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Look again at the section “The Department of Justice and FTC Merger Guidelines and the Herfindahl-Hirschman Index of Concentration.” Evaluate the following situations.
a. A market initially has 20 firms, each with a 5 percent market share. Of the firms, 4 propose to merge, leaving a total of 17 firms in the industry. Are the Department of Justice and the Federal Trade Commission likely to oppose the merger? Briefly explain.
b. A market initially has 5 firms, each with a 20 percent market share. Of the firms, 2 propose to merge, leaving a total of 4 firms in the industry. Are the Department of Justice and the Federal Trade Commission likely to oppose the merger? Briefly explain.

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Macroeconomics

ISBN: 9780135801741

8th Edition

Authors: Glenn Hubbard, Anthony Patrick O Brien

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