Two of the below firearms companies, Sturm Ruger and Winchester, have requested the Justice Department for permission to merge. Below are the annual gross sales figures for all of the firms in the firearms market.

Company Annual Gross Sales (in Millions)

Dakota 30

Magnum 10

Professional Ordinance 10

Remington 20

Republic 10

Smith & Wesson 10

Sturm Ruger 20

Taurus 10

Thompson 10

Winchester 20

1. Perform the Herfindahl Calculation, and show all work

2,700

2. What is the Herfindahl Index (approximately) for this Industry before the proposed merger?

3. What position do you think that the Federal Government likely take on this merger, and

why?