Company Market Share

Coca-Cola 37%

Pepsi-Co 35%

Cadbury Schwepper 17%

Other 11%

Compute the Herfindahl-Hirschman Index (HHI) market concentration rules that guide mergers between companies to prevent monopoly creation and to promote competition among firms. Based on the market shares of the companies in the table, the merger of which companies will be highly concentrated? What ethical rules will be affected based on U.S. antitrust laws and merger guidelines in regard to a highly concentrated market

Do you think the Department of Justice and the Federal Trade Commission would approve a merger between any two of the first three companies listed in the table based U.S. merger guidelines and antitrust laws? Explain.

Do you think this market has barriers to entry? If yes, what might be the market barriers?