An industry has the following market shares: 30% 20% 10% 5% What is the Pre-merger index? What is the post-merger index? What is the increase or decrease in the index after the merger? Should a merger between the 1st and 3rd largest firms be allowed based on the Herfindhal Index? Why or why not
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An industry has the following market shares: 30% 20% 10% 5% What is the Pre-merger index? What is the post-merger index? What is the increase or decrease in the index after the merger? Should a merger between the 1st and 3rd largest firms be allowed based on the Herfindhal Index? Why or why not
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- Assume the laptop market has 5 participants, each accounting for 20% of market share. Now two of the competitors decide to merge, how would this change the HH index? Would the proposed deal likely raise FTC’s concerns on reduced competition? a. Increase by 400. No. b. Increase by 400. Yes. c. Increase by 800. No. d. Increase by 800. Yes.AirAsia Berhad is the largest airline in Malaysia by fleet size and destinations. AirAsiaGroup operates scheduled domestic and international flights to more than 165 destinationsspanning 25 countries. AirAsia airlines always being known for its’ low-cost flight tickets,hence makes them as one of the most favor airlines among the Malaysians. Nonetheless, since the COVID-19 virus hits the world, AirAsia Berhad’s flight business has been seriouslyaffected and the share price of AirAsia Group Berhad fell as much as 11.23%. Assume the world has been recovered from the virus. AirAsia is planning to come outwith a brand new package to attract more customers to travel with their airlines so to boost their business and share price. Assume you are one of the employees working in AirAsia and your department are being informed to design a travelling package for both business travelers and vacationers. Your manager understands that both business travelers and vacationers have their own preference…One of the approaches for the Southern Company to comply with the Clean Air Act is to adopt fuel-switching technology. Do you think this strategic flexibility would have value to Southern Company’s shareholders? Why?
- True/False 1. Suppose that an industry has 10 firms where the market shares are ordered from the most to the least dominant firm {0.5,0.37,0.05,0.03,0.02,0.01,0.01,0.005,0.004,0.001g. The Herfindahl index is IH = 0.3.True/False 1. In the dominant rm model ( la Hotelling) an increase in the marginal cost of the dominant rm (with constant marginal costs) implies that pro ts necessarily decrease. 2. Suppose that an industry has 10 rms where the market shares are ordered from the most to the least dominant rm f0:5;0:37;0:05;0:03;0:02;0:01;0:01;0:005;0:004;0:001g. The Her ndahl index is IH = 0:3.The Blumen Yacht Building Company buys Marine Parts Corporation, a fum that makes shipbuilding components, despite the opposition of Marine's board of directors and its top management. This is an example of a(n) a) merger b) accommodation c) divestiture d) hostile takeover
- Carrot Computers and its competitors purchase touch screens for their tablet computers from several suppliers. The six makers of touch screens have market shares of, respectively, 19 percent, 18 percent, 14 percent, 16 percent, 20 percent, and 13 percent. a. What is the Herfindahl index for the touch screen manufacturing industry? b. By how much would a proposed merger between the two smallest touch screen makers increase the Herfindahl index? Would the government be likely to challenge that proposed merger? c. If Carrot Computers horizontally merges with its competitor Blueberry Handhelds, by how much would the Herfindahl index change for the touch screen industry?Q12 Assume the top six firms producing random access memory (RAM) in Canada comprising the industry have market shares of 21, 17, 16, 11, 9, and 6 percent. The remaining 10 firms each have market shares of 2 percent. The Herfindahl index for the RAM industry is Multiple Choice 65. 1,107. 1,264. 1,224.suppose fiat recently entered into an agreement and plan of merger with case for $4.3 billion. prior to the merger, the market for four wheel drive tractors consisted of five firms. the market was highly concentrated, with herfindahl-hirschman index of 2,915. case's share of that market was 13 percent, while fiat comprised just 7 percent of the market. if approved, by how much would the post merger herfindahl-hirschman index increase
- ANSWER ALL QUESTIONS 1,2 and 3 Sainsbury's-ASDA merger blocked by the regulator (Competition and Markets Authority) (CMA) 1) Do you think the reasons for a merger between ASDA and Sainsbury mentioned in the news are justifiable? Why did the supermarkets want to merge? The deal would have created the UK's biggest supermarket chain, accounting for £1 in every £3 spent on groceries. Sainsbury's and Asda had said the planned tie-up would have cut their costs, allowing them to lower prices for consumers across the UK. Analysts also believed it was designed to help the two supermarkets counter the rise of discounters Aldi and Lidl in the increasingly competitive grocery market. 2) The CMA provides economic justifications to the merger block by regulators in the UK. Do you think the justifications are reasonable? Why was the CMA concerned? But the CMA, which had previously raised concerns about the deal, said the merger would lessen competition at both a national and local level. Sainsbury's…In view of the empirical evidence, what factors do you think might be responsible for the current trends of increasing size and mergersAssume that Company A and Company B are in different time zones. Company A is located in the Eastern time zone, while Company B is located in the Western time zone. Except during peak periods, both operate at 70% capacity. During the peak period, each of them is operating at full capacity. The peak hour lasts around 50 minutes and begins at 8:00 a.m. and ends at 4:00 p.m. local time. Do you think it's a good idea for these two companies to perform a merger? Use the principle of economies of scale to support your answer.
