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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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.

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