2. Two industries are both made up of 9 firms. The markets shares of firms in...
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2. Two industries are both made up of 9 firms. The markets shares of firms in the two industries are given in the following table. All numbers are in percents. Market share Market share Firm Industry 1 60 Industry 2 123456789 5 5 5 2222 5 4 5 5 5 5 4444 1 a. Compute the 4-firm concentration ratios for these two industries. b. Compute the Herfindahl-Hirschman Index (HHI) for the two industries. c. Two of the big firms in Industry 2, each with a 20% market share, wish to merge into a single larger firm with a 40% market share. Compute the HHI for the 8 firms that would exist if the merger occurred. Shares would now be 40% for the merged firm, 20% for two firms, and 4% for the five small firms. What argument would you offer the Federal Trade Commission in favor of the merger, if you were asked to testify? 2. Two industries are both made up of 9 firms. The markets shares of firms in the two industries are given in the following table. All numbers are in percents. Market share Market share Firm Industry 1 60 Industry 2 123456789 5 5 5 2222 5 4 5 5 5 5 4444 1 a. Compute the 4-firm concentration ratios for these two industries. b. Compute the Herfindahl-Hirschman Index (HHI) for the two industries. c. Two of the big firms in Industry 2, each with a 20% market share, wish to merge into a single larger firm with a 40% market share. Compute the HHI for the 8 firms that would exist if the merger occurred. Shares would now be 40% for the merged firm, 20% for two firms, and 4% for the five small firms. What argument would you offer the Federal Trade Commission in favor of the merger, if you were asked to testify?
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Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
Posted Date:
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