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Please use the hypothetical information in the table, which concerns the acoustic guitar market, to answer the questions.Market share (%Firm nameTaylor34Dean32Ibanez14Gibson20Calculate the Herfindahl-Hirschman Index (HHI) for this market= IHHIf Taylor and Ibanez decided to merge, what action would the Federal Trade Commission (FTC) most likely take?O The FTC would challenge the merger because it raises the index by more than 50 points.O The FTC would likely not challenge the merger.O The FTC would challenge the merger automacally because the original index is so highO The FTC would issuewarning that the market is becoming too concentrated

Question
Please use the hypothetical information in the table, which concerns the acoustic guitar market, to answer the questions.
Market share (%
Firm name
Taylor
34
Dean
32
Ibanez
14
Gibson
20
Calculate the Herfindahl-Hirschman Index (HHI) for this market
= IHH
If Taylor and Ibanez decided to merge, what action would the Federal Trade Commission (FTC) most likely take?
O The FTC would challenge the merger because it raises the index by more than 50 points.
O The FTC would likely not challenge the merger.
O The FTC would challenge the merger automa
cally because the original index is so high
O The FTC would issue
warning that the market is becoming too concentrated
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Please use the hypothetical information in the table, which concerns the acoustic guitar market, to answer the questions. Market share (% Firm name Taylor 34 Dean 32 Ibanez 14 Gibson 20 Calculate the Herfindahl-Hirschman Index (HHI) for this market = IHH If Taylor and Ibanez decided to merge, what action would the Federal Trade Commission (FTC) most likely take? O The FTC would challenge the merger because it raises the index by more than 50 points. O The FTC would likely not challenge the merger. O The FTC would challenge the merger automa cally because the original index is so high O The FTC would issue warning that the market is becoming too concentrated

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Step 1

Herfindahl-Hirschman Index:

"HHI" represents the Herfindahl-Hirschman Index, a normally acknowledged proportion of market fixation. It is determined by squaring the piece of the pie of each firm contending in the market and afterward summing the subsequent numbers.

Step 2

Calculation of Herfindahl-Hirschman Index = (34)2 + (32)2 + (14)2 + (20)2

Hence, HHI = 2776

 

Step 3

If the Taylor and Ibanez merge, then their share will be (34 + 14) = 48

HHI after merger = (48)...

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