(4) You are analyzing mergers for the U.S. government using Herfindahl-Hirschmann Indices "HHI ). According to the merger guidelines , if the HHI reaches the range of 1000 -1800 after a merger, you will not allow the merger if it increased the HHI by 100 points or more. Suppose you are analyzing a market where there are 13 firms : 1 firm has 20 % of the market , 4 firms have 10% of the market each , and $ firms have 5% of the market each resulting in an HH I = 20 2 + 4(10 )2 + 8(5)? = 1000 (you need not check this calculation ). (i) Would you allow a merger between 2 firms that had 5% market share each? Explain your decision in 1-2 sentences (3 points ) (ii) Would you allow a merger between 2 firms that had 10% market share each? Explain your decision in 1-2 sentences (3 points ) (5) Company X is the sole domestic producer of the generic antidepressant Sensitrum with a marginal cost is $2 per dose . Demand is given by Q = 400 - 50 P (Q in millions of doses and P in US dollars ). There is a second producer in India whose marginal cost is INR. 189 (including transportation cost to the US ). The current exchange rate is INR 70/US dollar Firms set prices simultaneously. (i) What is the Indian firms marginal cost in US dollars ? (1 point )