Found h Rank Page Order 5.1 The following table represents the market share percentage for each firm in a hypothetical industry. A B C E FG H Firm D Market Share 15 6 12 20 10 19 11 a. Calculate the four-firm concentration ratio for this industry. b. Calculate the Herfindahl-Hirschman Index (HHI) for this industry. c. Would the Justice Department consider this industry as unconcentrated, moderately concentrated, or concentrated? Why? d. Suppose firms B, D, and F wanted to merge. What would be the value of the HHI following this merger? Would the Justice Department most likely challenge this merger? Why or why not?

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Found
h Rank
Page Order
5.1
The following table represents the market share percentage for
each firm in a hypothetical industry.
в с
E FG H
Firm
A
D
Market Share
15
6
12
7
20
10
19
11
a. Calculate the four-firm concentration ratio for this
industry.
b. Calculate the Herfindahl-Hirschman Index (HHI) for
this industry.
c. Would the Justice Department consider this industry as
unconcentrated, moderately concentrated, or
concentrated? Why?
d. Suppose firms B, D, and F wanted to merge. What
would be the value of the HHI following this merger?
Would the Justice Department most likely challenge
this merger? Why or why not?
Transcribed Image Text:Found h Rank Page Order 5.1 The following table represents the market share percentage for each firm in a hypothetical industry. в с E FG H Firm A D Market Share 15 6 12 7 20 10 19 11 a. Calculate the four-firm concentration ratio for this industry. b. Calculate the Herfindahl-Hirschman Index (HHI) for this industry. c. Would the Justice Department consider this industry as unconcentrated, moderately concentrated, or concentrated? Why? d. Suppose firms B, D, and F wanted to merge. What would be the value of the HHI following this merger? Would the Justice Department most likely challenge this merger? Why or why not?
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