Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 11, Problem 36P
Use Table 11.5 and Table 11.6 to calculate the Herfindal-Hirschman Index for the U.S. auto market. Would the FTC approve a merger between GM and Ford?
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Use the table to calculate the Herfindal-Hirschman Index for the U.S. auto market. Would the FTC approve a merger between GM and Ford?
Use the following table to calculate the Herfindal-Hirshman Index for the U.S. auto market. Would the FTC approve a merger between Gm and Ford? Explain your response. The table is......... GM 19% Ford 17% Toyota 14% Chrysler 11%
What is the significance of the Herfindahl-Hirschman Index (HHI) in measuring market concentration and competition within an industry?
Chapter 11 Solutions
Principles of Economics 2e
Ch. 11 - Is it true that a merger between two films that...Ch. 11 - Is it true that the four-firm concentration ratio...Ch. 11 - Some years ago. two intercity bus companies,...Ch. 11 - As a result of globalization and new information...Ch. 11 - Why would a firm choose to use one or more of the...Ch. 11 - Urban transit systems, especially those with rail...Ch. 11 - From the graph you drew to answer Exercise 11.6,...Ch. 11 - What real world changes made the deregulation...Ch. 11 - What are some of the benefits of the deregulation?Ch. 11 - What might some of the negatives of deregulation...
Ch. 11 - What is a corporate merger? What is an...Ch. 11 - What is the goal of antitrust policies?Ch. 11 - How do we measure a four-firm concentration ratio?...Ch. 11 - How do we measure a Herfindahl—Hirshman Index?...Ch. 11 - Why can it be difficult to decide what a market is...Ch. 11 - What is a minimum resale price maintenance...Ch. 11 - What is exclusive dealing? How might it reduce...Ch. 11 - What is a tie-in sale? How might it reduce...Ch. 11 - What is predatory pricing? How might it reduce...Ch. 11 - If public utilities are a natural monopoly, what...Ch. 11 - If public utilities are a natural monopoly, what...Ch. 11 - What is cost-plus regulation?Ch. 11 - What is price cap regulation?Ch. 11 - What is deregulation? Name some industries that...Ch. 11 - What is regulatory capture?Ch. 11 - Why does regulatory capture reduce the...Ch. 11 - Does either the four-firm concentration ratio or...Ch. 11 - What would be evidence of serious competition...Ch. 11 - Can you think of any examples of successful...Ch. 11 - If you were developing a product (like a web...Ch. 11 - In the middle of the twentieth century, major U.S....Ch. 11 - Why are urban areas willing to subsidize urban...Ch. 11 - Deregulation, like all changes in government...Ch. 11 - Do you think it is possible for government to...Ch. 11 - Use Table 11.5 to calculate the four-firm...Ch. 11 - Use Table 11.5 and Table 11.6 to calculate the...Ch. 11 - If the transit system were allowed to operate as...Ch. 11 - If the transit system were regulated to operate...Ch. 11 - If the transit system were regulated to provide...
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Similar questions
- Is it true that a merger between two films that are not already in the top four by size can affect both the four-firm concentration ratio and the Herfindahl-Hirshmau Index? Explain briefly.arrow_forwardPlease, write a 10 sentence (maximum) essay on how you could use the Herfindahl-Hirschman index to analyze changes in market concentration in your chosen industry/market (what data would you collect, how would you use the data to draw conclusions about market concentration).arrow_forwardAn industry consists of three firms with sales of $300,000, $700,000 and $250,000. a) Calculate the Herfindahl-Hirschman Index (HHI) b) Calculate the four-firm concentration ratio c) Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, do you think that the Department of Justice would attempt to block a horizontal merger between two firms with sales of $300,000 and $250,000? Explain.arrow_forward
- What is the significance of the Herfindahl-Hirschman Index (HHI) in measuring market concentration and how does it impact competition within an industry?arrow_forwardConsider an industry consists of three firms (Firm-A, Firm-B and Firm-C) with sales of AED300,000, AED700,000, and AED250,000; respectively. Calculate the Herfindahl-Hirschman index (HHI) for the industry. Calculate the four-firm concentration ratio (C4). Do you think the ‘Department of Justice’ (see the guideline below) would attempt to block a horizontal merger between Firm-A and Firm-C)? The Department of Justice’s Guidelines (Suppose): Suppose that the Department of Justice’s Guidelines suggest that antitrust authorities are more likely to challenge a merger when the relevant Herfindahl-Hirschman index is greater than 2,500 and the resulting increase in the index as a result of the merger is more than 200.arrow_forwardAn industry consists of three firms with sales of $205.000, $745.000, and $305,000. a. Calculate the Herfindahl-Hirschman Index (HH). Instruction Enter your response rounded to the nearest integer 16.66 Calculate the four-firm concentration ratio (Ca Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, is the Department of Justice likely to attempt to block a horizontal merger between two firms with sales of $205,000 and $305,000? Yes O Noarrow_forward
- An industry consists of three firms with sales of $285,000,$615,000 , and $310,000 . a. Calculate the Herfindahl-Hirschman index (HHI) . Instruction: Round to the nearest integer. b. Calculate the four-firm concentration ratio (C 4 ) . c. Based on the FTC and DOJ Horizontal Merger Guidellnes described in the text, is the Departmen of Justice likely to attempt to block a horizontal merger between two firms with sales of $285.000 and $310.000 ?arrow_forwardAn industry consists of three firms with sales of $200,000, $500,000, and $400,000. a. Calculate the Herfindahl-Hirschman index (HHI). Instruction: Enter your response rounded to the nearest integer. b. Calculate the four-firm concentration ratio (C4). c. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, is the Department of Justice likely to attempt to block a horizontal merger between two firms with sales of $200,000 and $400,000? O Yes O No Note:- Please refrain from offering handwritten solutions. Please ensure that your response maintains accuracy and quality to avoid receiving a downvote. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardWhat would the Herfindahl-Hirschman Index (HHI) be in each of the following situations? 1 firm with a monopoly in the marketarrow_forward
- Suppose that in the fast-food restaurant industry the four largest restaurants account for 30 %, 20%, 15%, and 5% of the market share, respectively, and the 10 other small restaurants each account for 3%. If two of the 10 small restaurants merged, other things being equal, what would be the four-firm concentration ratio (CR) and the Herfindahl-Hirschman index (HHI), respectively? Select one: a. 70% 1640 b. 70%; 1658 C. 71%; 1640 d: 71%; 1658arrow_forwardUse Table to calculate the four-firm concentration ratio for the U.S. auto market. Does this indicate a concentrated market or not?arrow_forwardwhat is the Four-firm concentration ratio (CR4)? what is the Herfindahl-Hirshman Index (HHI)? and how are they different?arrow_forward
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