Determine the Hefindahl-Hirschmann index for that industry.

Suppose an industry is composed of six firms. Four firms have sales of $100000 each and two firms Show more Suppose an industry is composed of six firms. Four firms have sales of $100000 each and two firms have sales of $50000 each. a. Explain how concentration ratios are calculated. Determine the concentration ratios in the market. b. Explain how the Herfindahl-Hirschmann index is constructed. Determine the Hefindahl-Hirschmann index for that industry. c. Based on the FTC and DOJ Horizontal Merger guidelines do you think that the FTC would attempt to block a horizontal merger between two firms with sales of $100000 and $50000? Explain. d. Explain how the FTC decides on whether to challenge a proposed merger? What other aspects does the agency consider in addition to the HHI and market concentration ratios? Use the link below to prepare your answers. http://www.ftc.gov/reports/ethanol/2007ethanol.pdf Show less

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