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A certain industry with five firms is under scrutiny due to an impending merger. Firm 1 has 30% of the market while firm 2 and
A certain industry with five firms is under scrutiny due to an impending merger. Firm 1 has 30% of the market while firm 2 and 3 has 25%. The remaining firms have 10% each. What is the Herfindahl-Hirschman index for the industry? Based on DOJ guidelines, do you think it is likely that the Justice Department would block a merger between firms 3 and 4? What other aspects of the marketplace might the department consider as it evaluates the shares?
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