An industry consists of three firms with sales of $225,000, $45,000, and $315,000. Calculate the Herfindahl-Hirschman index (HHI). Calculate the four-firm concentration ratio (C4). Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, do you think the Department of Justice would attempt to block a horizontal merger between two firms with sales of $225,000 and $315,000? Explain.

An industry consists of three firms with sales of $225,000, $45,000, and $315,000. Calculate the Herfindahl-Hirschman index (HHI). Calculate the four-firm concentration ratio (C4). Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, do you think the Department of Justice would attempt to block a horizontal merger between two firms with sales of $225,000 and $315,000? Explain.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter16: Government Regulation

Section: Chapter Questions

Problem 3E

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