A) There is an industry with 16 firms. There are two large firms with 35% market share each, four medium-sized firms with 5% market share each, and ten small firms with 1% market share each. Calculate the Herfindahl-Hirschman Index (HHI) for this industry. Please show your work.
B) Is this industry either highly concentrated, moderately concentrated, or not concentrated?
C) There is an industry with 16 firms. There are two large firms with 35% market share each, four medium-sized firms with 5% market share each, and ten small firms with 1% market share each. Say one of the large firms merged with one of the small firms. By how much would this increase the industry's HHI? Please show your work.
D) According to the guidelines presented in class, should the FTC either approve the merger, investigate the merger further, or challenge the merger?