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7. An industry consists of three firms with sales of $225,000, $45,000 and $315,000. a. Calculate the Herfindahl-Hirschman index (HHI) b. Calculate the four-firm concentration
7. An industry consists of three firms with sales of $225,000, $45,000 and $315,000. a. Calculate the Herfindahl-Hirschman index (HHI) b. Calculate the four-firm concentration ratio (C4) c. Based on the FTC and DOJ Horizontal Merger Guideline described in the text, do you think the Department of Justice would attempt to block a horizontal merger between two firms with sales of $225,000 and $315,000? Explain. Based on the information given, explain whether the following industry is best characterized by the model of perfect competition, monopoly, monopolistic competition, or oligopoly. d. Industry A has a four-firm concentration ratio of .005% and a HHI of 75. A representative (or average) firm has a Lerner Index of .45 and a Rothschild index of .34. e. Industry B has a four-firm concentration ratio of .0001% and a HHI of 55. A representative (or average) firm has a Lerner Index of .0034 and a Rothschild index of .00023. f. Industry C has a four-firm concentration ratio of 100% and a HHI of 10,000. A representative (or average) firm has a Lerner Index of .4 and a Rothschild index of 1.0. g. Industry D has a four-firm concentration ratio of 100% and a HHI of 5,573. A representative (or average) firm has a Lerner Index of .43 and a Rothschild index of .76
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