Question
An industry consists of six firms with sales of $500 million, $1 billion, $2 billion, $3 billion, $4 billion and $5 billion. a) Calculate the
An industry consists of six firms with sales of $500 million, $1 billion, $2 billion, $3 billion, $4 billion and $5 billion.
a) Calculate the Herfindahl-Hirschman index (HHI).
b) Calculate the four-firm concentration ratio (C4).
c) Based on the U.S. Department of Justice's Merger Guidelines described in the text, do you think the Department of Justice would block a horizontal merger between the two firms with sales of $500 million and $1 billion? Explain, and support your explanation with calculations.
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Managerial Economics and Organizational Architecture
Authors: James Brickley, Clifford W. Smith Jr., Jerold Zimmerman
6th edition
73523143, 73523149, 978-0073523149
