4. Answer all parts of this question. (a) [10 marks] Competition law in the country of Wonderland prohibits all mergers that result in a single firm having more than 75% of sales in any market. A new government proposes to make changes to the law and asks for your advice. Assess this law from a welfare perspective and highlight its shortcomings. (b) [15 marks] A researcher has estimated a model of industry profitability using cross-industry data and has found a positive coefficient on the concentration variable. (The results were not affected when different measures of concentration were used.) He claims that the results show that higher concentration leads to higher industry profit. What is the theoretical basis for this claim? Do you agree with the researcher's conclusion? What would your advice be to a policy maker worried about the high level of concentration in many industries