1. Suppose an industry is composed of seven producers with market shares given in the table below. (12 points) (a) Compute the HerfindahlHirschman index (HHI) for this market. (b) If rms B and C merge, how will this affect the HHI, all else being equal? (c) Instead, if rm A splits into two equal-sized competing firms, how would this affect the HM, all else being equal? Support your answers with specific calculations. Market Firm Sham 1%! A 40 B 20 C 15 D ID E 9 F 5 G l