An industry consists of five firms with annual sales of $1.2 million,

$250,000, $100,000, $75,000 and $50,000.

a. Calculate the Herfindahl-Hirschman Index for this industry.

b. Calculate the 4-firm concentration ratio for this industry.

c. In your opinion, would the U.S. Justice Department approve a merger between the two largest firms in this industry? Explain.

d. Would the U.S. Justice Department approve a merger between the third and the fourth largest firms? Explain.