Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
9th Edition
ISBN: 9781259290619
Author: Michael Baye, Jeff Prince
Publisher: McGraw-Hill Education
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Question
Chapter 14, Problem 1CACQ
(A)
To determine
The premerger Herfindahl - Hirschman Index for the market is to be calculated.
(A)
Expert Solution
Explanation of Solution
Market share percentage of each eight firms is 12.5%
To calculate the HHI:
Therefore, the premergerHHI is 1250.
(B)
To determine
The Herfindahl- Hirschman Index post-merger is to be calculated.
(B)
Expert Solution
Explanation of Solution
After the merger of two firms, the HHI' will be
Therefore, after merger HHI' is 1562.5
(C)
To determine
Whether the Justice department would attempt to block the mergerbetween any two of the firms is to be explained.
(C)
Expert Solution
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.
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Chapter 14 Solutions
Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
Ch. 14 - Prob. 1CACQCh. 14 - Prob. 2CACQCh. 14 - Prob. 3CACQCh. 14 - Prob. 4CACQCh. 14 - Prob. 5CACQCh. 14 - Prob. 6CACQCh. 14 - Prob. 7CACQCh. 14 - Prob. 8CACQCh. 14 - Prob. 9CACQCh. 14 - Prob. 10CACQ
Ch. 14 - Prob. 11PAACh. 14 - Prob. 12PAACh. 14 - Prob. 13PAACh. 14 - Prob. 14PAACh. 14 - Prob. 15PAACh. 14 - Section 16(a) of the Securities and Exchange Act...Ch. 14 - Prob. 17PAACh. 14 - Prob. 18PAACh. 14 - Prob. 19PAACh. 14 - Prob. 20PAACh. 14 - Prob. 21PAACh. 14 - Prob. 22PAACh. 14 - Prob. 23PAA
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