Consider these fictitious sales data for domestic and foreign firms, and answer the questions that follow:

(a) Domestic producers 1-6 and foreign firms 7-11 produce similar but distinguishable products. Currently, antitrust authorities define the relevant market to include both domestic and foreign firms. Calculate the four-firm concentration ratios and Herfindahi-Hirschman indexes under this definition of the relevant market.

(b) Now suppose that antitrust authorities determine that the relevant market includes only domestic producers. Recalculate the market shares and squared market shares implied by the table under this definition of the relevant market, and use these data to calculate the four-firm concentration ratio and Herfindahi-Hirschman indexes.

(c) What do your answers to (a) and (b) reveal about the importance to antitrust policy of correctly determining the relevant market for a product? Explain.

ping penalties under current these fictitious sales data for domestic and foreign firms, and answer the stions that follow estic sales of domestic firms Domestic sales of foreign firms Sales Firm Sales Firm 750 7.5 56.25 4,200 42. 1764.00 2,000 20.0 400.00 0.25 50 0.5 50 0.5 0.25 9 1,950 19.5 380.25 50 0.5 0.25 10 450 4.5 20.25 50 0.5 0.25 11 400 4.0 16.00 0.25 50 0.5 Total 1,000 Total 9,000 Sales are in millions of units of the national currency. notes percentage of domestic and foreign share of total domestic sales, rounded to the nearest tenth of one percentage point. denotes squared percentage of market share of sales