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onomics Problem 3. Market Concentration [1 point] In 2019, the retail industry in the Czech Republic is characterized by the existence of 8 chains offering
onomics Problem 3. Market Concentration [1 point] In 2019, the retail industry in the Czech Republic is characterized by the existence of 8 chains offering iden- tical products. Two of them announced plans to leave the market and sell their stores to another chain in the market. The corresponding market shares s;, i= 1, .... 8, are given in the following table: Country Firmis Concentration Index 2 3 5 7 8 HHI 2019 40% 15% 13% 8% 6% 6% 5%% 5% 2020 53% 15% 15% 0% 6% 6% 5% 0% (a) Compute the concentration measures ], and #H/ for both years. (b) compute the change in concentration resulting from the acquisition of stores by firm 1, A/, = (7020-70is and AHHI = HH 12020 - 17 1 /2019 (c) Which index represents concentration more precisely? Would you advise the Czech anti-trust regulatory body to approve the acquisition? Explain why or why not
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