Suppose the two companies with 20 and 10 market shares


The U.S. Department of Justice considers a market with a result of less than 1,000 to be a competitive marketplace; a result of 1,000-1,800 to be a moderately concentrated marketplace; and a result of 1,800 or greater to be a highly concentrated marketplace. As a general rule, mergers that increase the HHI by more than 100 points in concentrated markets raise antitrust concerns. Consider a market of 24 companies and compute its HHI for SI = 30%, 20%, 10%, 10%, 20 firms 0.5% respectively. Suppose the two companies with 20% and 10% market shares. Determine change in HHI.

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Business Economics: Suppose the two companies with 20 and 10 market shares
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