Q1. The banking market in Athens, Ohio currently has four banks with market shares of 60 percent 20 percent, 15 percent and 5 percent. The two smallest banks have proposed merging. Under the standard merger guidelines of the Federal Reserve and the Justice Department, is the merger likely to be approved? Why or why not? In your answer, be as quantitative as possible.
Q2. Do you think these firms would welcome congressional legislation which restricted the amount that any one firm could spend on advertising to $1 million yearly, and thereby allowed them all to drastically reduce their costs without fear of losing ground to each other? Are wireless telephone companies in the US market conducting the same practice of non-price competition? Explain your answer in both cases
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