In 1993 Mattel proposed merging Fisher value for $1.2 billion. In toy industry Mattel is a major player with 11% of the market. Fisher-Price has 4%. The other two large firms are Tyco, with a 5% share, and Hasbro, with a 15% share. The other two firms are Tyco, with a 5% share, and Hasbro, with a 15% share. In the infant/preschool toy market, Mattel has an 8% share and Fisher-Price has a 27% share, the largest. The other two large firms are Hasbro, with a 25% share, and Rubbermaid, with a 12% share.

a) What are the approximate Herfindahl and four-firm concentration ratios for these firms in each industry?
b) If you were Mattel's economist, which industry definition would you suggest using in court if you were challenged by the government?
c) Give an argument why the merger might decrease competition.
d) Give an argument why the merger might increase competition.