Managerial Economics > QUESTIONS & ANSWERS > Week 7 Assignment Monroe College MG 640 (All)

Week 7 Assignment Monroe College MG 640

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MG 640 Managerial Economics Homework Assignment The Nature of Industry For this week read Chapter 7, pages 245-273 Answer the following questions: Question 2. On page 269 An industry consists of ... three firms with sales of $300,000, $700,000 and $250,000. a. Calculate the Herfindahl-Hirschman index (HHI). SHOW ALL WORK HHI = 10,000 [ ( 250,000 )2 / 1,250,000 + (300,000)2 / 1,250,000 + (700,000)2 / 1,250,000 ] = 4,112 b. Calculate the four-firm concentration ratio (C4). SHOW ALL WORK C4 = S1+S2+S3+S4 / ST = 250,000 + 300,000+ $700,000 / 1,250,000 C4 = 1 Hence the four-firm concentration ratio is 100%. c. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, do you think the Department of Justice would attempt to block a horizontal merger between two firms with sales of $300,000 and $250,000? Explain [Show More]

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