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You consider an industry with numerous very small firms and five large firms. Their market shares are as follows: (9 points) Company Market Share A

You consider an industry with numerous very small firms and five large firms. Their market shares are as follows: (9 points)

Company Market Share

A 30%

B 15%

C 15%

D 5%

E 1%

(a) Companies A and B merge, what should the reaction of the DoJ be according to the Agency standards? Show your work.

(b) Consider now that the merger is between companies A and D. What should the reaction of the DoJ be according to the Agency standards? Show your work.

(c) Consider now that the merger is between companies A and E. What should the reaction of the DoJ be according to the Agency standards? Show your work.

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