5.1 The following table represents the market share percentage for each firm in the prepared baby food industry in the US:

2000 2001 2002 2003 2004 2005 2006 2007 2008 Beech-Nut 13% 13% 12% 11% 12% 13% 12% 11% 12%

Earth’s Best 2% 1% 1% 1% 1% 2% 3% 4% 6%

Gerber 72% 73% 76% 78% 79% 78% 79% 81% 80%

Heinz Nature’s Goodness 13% 12% 10% 8% 7% 6% 5% 4% 2%

a. Calculate the three-firm concentration ratio for the prepared baby-food industry between 2000 and 2008.

b. Calculate the Herfindahl-Hirschman Index (HHI) for this industry between 2000 and 2008.

c. Did this industry become more or less concentrated between 2000 and 2008? Explain.

d. Explain the impact of a merger on market concentration.