Nearly 50 firms make pencils and pens in the United States. We R' Write is one of those firms. These firms range from large companies such as Bic, Paper Mate, and Pilot to generic-brand pencils and pens. There are also higher-end pens and pencils produced by firms such as Montblanc and Cross. We R' Write would like to determine how they can better compete against the other firms in the market. For this question, address the following:

• What is the market structure for the pen and pencil market in the United States? What characteristics of the pen and pencil market help you draw your conclusion?
• Given the market structure, how can We R' Write better compete against other firms in the market?
• At an industry trade show this past December, We R' Write management heard rumors that the three largest pen manufacturers in the United States are considering a merger. If this merger takes place, the new company will potentially control 62% of the total market share of pen sales. Could the federal government block this type of merger? If so, what specific problems would the federal government have with this type of merger?