Suppose that the market shares for antidepressants are as follows: Brand Market Shares Prozac 40% Paxil 25% Zoloft 25% Others 10%
1. Determine the Herfindahl-Hirschman Index (HHI) for antidepressant market based upon these market share numbers.
2. Determine the Herfindahl-Hirschman Index (HHI) for antidepressant market under the assumption that makers of Zoloft and Prozac merge.
3. Is the proposed merger of the makers of Zoloft and Prozac dangerously anti-competitive?