This topic contains a solution. Click here to go to the answer

Author Question: Suppose the industry for washing machines has only four firms. The market shares are: Firm A, 40 ... (Read 118 times)

ec501234

  • Hero Member
  • *****
  • Posts: 573
Suppose the industry for washing machines has only four firms. The market shares are: Firm A, 40 percent; Firm B, 20 percent; Firm C 20, percent; and Firm D, 20 percent.
 
  a) What is the Herfindahl-Hirschman Index (HHI)? b) If Firms C and D were to announce a merger, would the Department of Justice oppose the merger?

Question 2

Warranties in the used car market ________ the problem of private information thereby causing the price of good and bad used cars to ________.
 
  A) reduce; be the same
  B) reduce; differ
  C) magnify; be the same
  D) magnify; differ



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Benayers

  • Sr. Member
  • ****
  • Posts: 328
Answer to Question 1

a) The HHI is 2,800.
b) Yes, the Department of Justice would oppose the merger. If the merger occurred, the new HHI would be 3,600. The merger would increase the HHI by 800 points. The Department of Justice's guidelines are to challenge a merger if the initial HHI exceeds 1,800 and the merger raises the HHI by more than 50 points. The merger considered in the problem easily falls under these guidelines.

Answer to Question 2

B




ec501234

  • Member
  • Posts: 573
Reply 2 on: Jun 29, 2018
:D TYSM


irishcancer18

  • Member
  • Posts: 310
Reply 3 on: Yesterday
Gracias!

 

Did you know?

The longest a person has survived after a heart transplant is 24 years.

Did you know?

There are more bacteria in your mouth than there are people in the world.

Did you know?

Certain rare plants containing cyanide include apricot pits and a type of potato called cassava. Fortunately, only chronic or massive ingestion of any of these plants can lead to serious poisoning.

Did you know?

Addicts to opiates often avoid treatment because they are afraid of withdrawal. Though unpleasant, with proper management, withdrawal is rarely fatal and passes relatively quickly.

Did you know?

Certain topical medications such as clotrimazole and betamethasone are not approved for use in children younger than 12 years of age. They must be used very cautiously, as directed by a doctor, to treat any child. Children have a much greater response to topical steroid medications.

For a complete list of videos, visit our video library