Question

6 firms makeup most of an industry and have the following market shares: A 25 B...

6 firms makeup most of an industry and have the following market shares:

A 25

B 20

C 20

D 15

E 10

F 5

Firm B wants to acquire Firm E.

  1. Calculate the Herfindahl-Hirschman Index (HHI), showing all work, given present market shares.
  1. Calculate the Herfindahl-Hirschman Index (HHI), showing all work, assuming Firm B acquires Firm E.
  1. Will the Department of Justice likely approve this acquisition? Why?
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