
(A)
The premerger Herfindahl - Hirschman Index for the market is to be calculated.
(A)

Explanation of Solution
Market share percentage of each eight firms is 12.5%
To calculate the HHI:
Therefore, the premergerHHI is 1250.
(B)
The Herfindahl- Hirschman Index post-merger is to be calculated.
(B)

Explanation of Solution
After the merger of two firms, the HHI' will be
Therefore, after merger HHI' is 1562.5
(C)
Whether the Justice department would attempt to block the mergerbetween any two of the firms is to be explained.
(C)

Explanation of Solution
Since, the merger will give an increase of 312.5 points in HHI which is more than 100 and thus it is high.
The Justice Department will block the merger.
Want to see more full solutions like this?
Chapter 14 Solutions
EBK MANAGERIAL ECONOMICS & BUSINESS STR
- M” method Given the following model, solve by the method of “M”. (see image)arrow_forwardAs indicated in the attached image, U.S. earnings for high- and low-skill workers as measured by educational attainment began diverging in the 1980s. The remaining questions in this problem set use the model for the labor market developed in class to walk through potential explanations for this trend. 1. Assume that there are just two types of workers, low- and high-skill. As a result, there are two labor markets: supply and demand for low-skill workers and supply and demand for high-skill workers. Using two carefully drawn labor-market figures, show that an increase in the demand for high skill workers can explain an increase in the relative wage of high-skill workers. 2. Using the same assumptions as in the previous question, use two carefully drawn labor-market figures to show that an increase in the supply of low-skill workers can explain an increase in the relative wage of high-skill workers.arrow_forwardPublished in 1980, the book Free to Choose discusses how economists Milton Friedman and Rose Friedman proposed a one-sided view of the benefits of a voucher system. However, there are other economists who disagree about the potential effects of a voucher system.arrow_forward
- The following diagram illustrates the demand and marginal revenue curves facing a monopoly in an industry with no economies or diseconomies of scale. In the short and long run, MC = ATC. a. Calculate the values of profit, consumer surplus, and deadweight loss, and illustrate these on the graph. b. Repeat the calculations in part a, but now assume the monopoly is able to practice perfect price discrimination.arrow_forwardThe projects under the 'Build, Build, Build' program: how these projects improve connectivity and ease of doing business in the Philippines?arrow_forwardhow utillity relate to microeconomics ?arrow_forward
- How Command Economics Relate to Principle Of Economics?arrow_forwardhow commond economies relate to principle Of Economics ?arrow_forwardCritically analyse the five (5) characteristics of Ubuntu and provide examples of how they apply to the National Health Insurance (NHI) in South Africa.arrow_forward
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage LearningManagerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
- Survey of Economics (MindTap Course List)EconomicsISBN:9781305260948Author:Irvin B. TuckerPublisher:Cengage Learning




