zxc5566 Posts: 2, Reputation: 1 New Member #1 Apr 30, 2016, 04:04 PM
Calculate the HHI
Consider an industry with 7 firms whose market shares are given in the following frequency table:

Market Share # of firms
7 % 2
12 % 2
16 % 2
30% 1

a. Calculate the HHI for this industry

For each of the following parts, compare the post-merger HHI with the pre-merger HHI from part a.

b. Suppose the one of the firms with a 12% market share announces that it plans to buy one of the firms with a7% market share. Calculate the post-merger HHI. Is it likely that the U.S. Department of Justice will challengethe merger? Why or why not?

c. Suppose the two firms with a 7% market share announce plans to merge together. Calculate the post-mergerHHI. Is it likely that the U.S. Department of Justice will challenge the merger? Why or why not?

d. Suppose the firm with the 30% market share announces plans to buy one of the firms with a 12% marketshare. Calculate the post-merger HHI. Is it likely that the U.S. Department of Justice will challenge themerger? Why or why not?
 ma0641 Posts: 15,681, Reputation: 1012 Uber Member #2 Apr 30, 2016, 04:45 PM
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