Refer to the Article Summary. Assuming the findings are correct ...

[kamilo84]

Refer to the Article Summary. Assuming the findings are correct and all else equal, people who do not shop at Trader Joe's can still benefit from living near the store, as is shown by the higher home values.
 
  As a result, the marginal social benefit from living near a Trader Joe's is ________ the marginal private benefit to those who shop at Trader Joe's.
  A) less than B) equal to C) greater than D) unrelated to

Question 2

Suppose that the widget industry has a Herfindahl-Hirschman index of 1,200 . Two firms have proposed a merger. Firm A has a current market share of 5 percent. Firm B has a market share of 7 percent.
 
  Will the Justice Department challenge the merger? Explain.

[Jadwiga9]

Answer to Question 1

C

Answer to Question 2

The merger will raise the Herfindahl-Hirschman index by 70 points (122) - (52) - (72). Since the industry is only moderately concentrated, the Justice Department will only challenge a merger that increases the index by more than 100 points. Therefore, the merger will not be challenged.