An industry consists of 6 firms, with sales of $100,000, $500,000, $400,000, $300,000, 60,000, and $75,000. Now, suppose the two smallest firms merge.
Q1. Calculate the four-firm concentration ratio (C4) before the merger. Show your work.
Q2. Calculate the four-firm concentration ratio (C4) after the merger. Show your work.
Q3. Calculate the Herfindahl-Hirschman index (HHI) before the merger. Show your work.
Q4. Calculate the Herfindahl-Hirschman index (HHI) after the merger. Show your work.
Q5. Do you think the U.S. Department of Justice would try to block the merger?