In 2011, the Justice Department rejected AT&T€™s proposal to purchase T-Mobile for $39 billion due to anticompetitive concerns. A few years later, Sprint launched its own attempt to purchase T-Mobile. In 2016, Sprint€™s discussions with T-Mobile about a potential takeover were still ongoing.

a. Use the accompanying table to calculate the HHI before and after the proposed 2011 merger of AT&T and T-Mobile.

b. Use the table to calculate the HHI before and after the proposed merger of Sprint and T-Mobile in 2016.

c. Based on your calculations in parts a and b, do you think the Justice Department is likely to approve a merger between Sprint and T-Mobile?

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Carrier 2011 2016 Verizon 34% 35% AT&T 32 32 Sprint 17 T-Mobile 10 17