(Answered) Assume an industry is composed of the following eight

Finance

Assume an industry is composed of the following eight firms.

Company Market Share

Firm A ........... 30 percent

Firm B ........... 25 percent

Firm C ........... 15 percent

Firm D ........... 10 percent

Firm E ........... 7 percent

Firm F ........... 6 percent

Firm G ........... 4 percent

Firm H ........... 3 percent

HHI= sum of square of shares of all firms.

a. If Firms B and C propose a merge, would the Antitrust Division likely challenge the merger? Why or why not?

b. If firms G and H propose a merger, would the Antitrust Division likely challenge the merger? Why or why not? 1984the rise in HHI is only 24-no action is warranted.

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