An industry consists of three firms with Sales of $200,000, $500,000 and $400,000. a. Calculate the Herfindahl-Hirschmann
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An industry consists of three firms with Sales of $200,000, $500,000 and $400,000.
a. Calculate the Herfindahl-Hirschmann Index (HHI) for this industry.
b. Calculate the four-firm concentration ratio (C4).
c. Based on the FTC and DOJ Horizontal Merger Guidelines described in Chapter 7, explain specifically whether
you think the Department of Justice would attempt to block a horizontal merger between two firms with sales of
$200,000 and $400,000.Calculate the new concentration ratios that would result if this merger were to occur to
justify your answer.
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