I2

2. Below is a chart showing two different markets, A and B, with their corresponding firms' market shares (in percentage). a) Calculate the CR4 and CR6 for each market and compare each CR with the other. Explain which market is more concentrated. b) Calculate the HH/ for each market and determine which is more concentrated. What does it mean for one market to be more concentrated than the other? c) Calculate the numbers equivalent for each markets HHI. d) Now assume the bottom three firms in both markets merge; how will this affect HHI for each market? Explain. e) From the above question, list a few different reasons why the bottom firms may want to merge. What type of merger would this be? Market A Market B 50 25 15 20 10 20 10 13 5 10 5 4 5 2 2