In a market where there is a certain number of companies with their percentage of participation surprisingly specified: Pencil manufacturers Bic OfficeMax Derwent Faber-Castell Lápices S.A. Lapicitos S.A. % share 25% 20% 15% 15% 15% 10% a) Calculate the market concentration index in the pencil industry? Use Hirschamn-Herfindahl index. b) Which firms could merge in this market without it becoming a highly concentrate market? c) How should the concentration index be analyzed according to Hannah and Kay? (Ref: Desirable criteria of a concentration index)

In a market where there is a certain number of companies with their percentage of participation surprisingly specified: Pencil manufacturers Bic OfficeMax Derwent Faber-Castell Lápices S.A. Lapicitos S.A. % share 25% 20% 15% 15% 15% 10% a) Calculate the market concentration index in the pencil industry? Use Hirschamn-Herfindahl index. b) Which firms could merge in this market without it becoming a highly concentrate market? c) How should the concentration index be analyzed according to Hannah and Kay? (Ref: Desirable criteria of a concentration index)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter16: Government Regulation

Section: Chapter Questions

Problem 2E

See similar textbooks

Similar questions

Is it true that the four-firm concentration ratio puts more emphasis on one or two very large films, while the Herfindahl-Hirshmau Index puts more emphasis on all the films in the entire market? Explain briefly.
When OPEC raised the price of oil dramatically in the mid-1970s, experts said it was unlikely that the cartel could stay together over the long term-that the incentives for individual members. to cheat would become too strong. More than fort),r years later, OPEC still exists. Why do you think OPEC has been able to beat the odds and continue to collude? Hint: You may wish to consider non-economic reasons.
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 a Herfindahl-Hirschman index of 3,085. Case’s share of that market was 11 percent, while Fiat comprised just 7 percent of the market. If approved, by how much would the postmerger Herfindahl-Hirschman index increase?
(Mergers and Public Policy) Calculate the Herfindahl-Hirschman Index (HHI) for each of the following industries.Which industry is the most concentrated?a. An industry with five firms that have the followingmarketshares: 50 percent, 30 percent, 10 percent,5 percent, and 5 percentb. An industry with five firms that have the followingmarketshares: 60 percent, 20 percent, 10 percent,5 percent, and 5 percentc. An industry with five firms, each of which hasa 20 percent market share
You are the manager in a market composed of 20 firms, each of which has a 5.00 percent market share. In addition, each firm has a strong financial position and is located within a 100-mile radius of its competitors. a. Calculate the premerger Herfindahl-Hirschman index (HHI) for this market? b. Suppose that any two of these firms merge. What is the postmerger HHI? c. Based only on the information contained in this question and on the U.S. Department of Justice Horizontal Merger Guidelines described in this chapter, do you think the Justice Department would attempt to block a merger between any two of the firms?multiple choice It may but will also consider other factors. It likely will not. It likely will.
You are the manager in a market composed of eight firms, each of which has a 12.5 percent market share. In addition, each firm has a strong financial position and is located within a 100-mile radius of its competitors. a. Calculate the premerger Herfindahl-Hirschman index (HHI) for this market. b. Suppose that any two of these firms merge. What is the postmerger HHI?
Consider a duopoly market with 2 firms. Aggregate demand in this market is given byQ = 500 – P,where P is the price on the market. Q is total market output, i.e., Q = QA + QB, where QA is the output by Firm A and QB is the output by Firm B. For both firms, marginal cost is given by MCi = 20, i=A,B. Assume the firms compete a la Cournot. a)Find the inverse demand in this market. Note that marginal revenue for both firms is given by MRA=500-2QA-QB,MRB=500-QA-2QB. b)Describe what a best-response curve is and how to find it. c)Derive the best-response function for each firm. hi, can you answer part a.b,c please. If possible, please answer this question in typing as i can't read hand -written answers, thanks
K DOJ and FTC use the Hertindahl-Hirschman Index as a measure of concentration. How is this calculated? By O A. adding up the market shares of all firms in the industry, squaring this number and then dividing by the number of firms in the industry. OB. determining the market shares of the four largest firms in the industry, but unlike the concentration ratio, the Index includes sales in the United States by foreig OC. squaring the four - firm concentration ratio of the industry and dividing this number by the total number of firms in the industry. D. squaring the market shares of each firm in an industry and then adding up the values of the squares.
The Competition Bureau in Canada wants to increase competition and reduce monopoly power. Thus it it worries about industry concentration in Canada. Let's assume that the Canadian halibut processing industry there are only two firms(duopoly). Under such a market structure, if one of the halibut processing firm increases its price, then the other firm in the halibut processing industry can: keep the price of its processed halibut constant and thus increase its market share. keep its price of its processed halibut constant and thus decrease its market share. decrease its price of its processed halibut and thus decrease its market share. try to achieve economies of scale. increase its price of its processed halibut and thus increase its market share.