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Assume the following hypothetical market shares - percent - of companies in an oligopoly. Before and after the proposed merger (Penny's and K-Mart) (a) Calculate
Assume the following hypothetical market shares - percent - of companies in an oligopoly. Before and after the proposed merger (Penny's and K-Mart) (a) Calculate the Herfindahl index, before and after the proposed merger. Remember the Bench marks: from zero in competition to 10000 in monopoly. The FTC has a bench mark of 1700 or 1800 . What is your conclusion? (b) Should the FTC allow the merger? What is the criteria? (c) Would that merger be good for the consumers? Why or why not? (d) Who gains and who loses by allowing this merger? (e) Provide an Excel pie chart of the market shares before and after the merger. (f) Here comes Amazon, the largest retailer in the world. How is the market competition changing
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