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2. Company Firm A Firm B Firm C Firm D Firm D Firm F Sales 29.50 36.90 47.20 58.

ID: 1092638 • Letter: 2

Question

2.

Company

Firm A

Firm B

Firm C

Firm D

Firm D

Firm F

Sales

29.50

36.90

47.20

58.10

42.93

12.34

Looking at the data, what type of market structure would you assume for these firms? 2.2. Derive the HHI the top 2 firms and discuss the market structure. 2.3. Suppose the two largest and the smallest firms decide to merge; as an analysis with the Federal Trade Commission in Washington, D. C., what would be your recommendations?

Company

Firm A

Firm B

Firm C

Firm D

Firm D

Firm F

Sales

29.50

36.90

47.20

58.10

42.93

12.34

Explanation / Answer

Total Sales = 29.50+36.90+47.20+58.10+42.93+12.34 =

Share of sales for each company

Company

Firm A

Firm B

Firm C

Firm D

Firm E

Firm F

Sales

0.1300

0.1625

0.2079

0.2560

0.1891

0.0543

The Herfindahl index (also known as Herfindahl

Company

Firm A

Firm B

Firm C

Firm D

Firm E

Firm F

Sales

0.1300

0.1625

0.2079

0.2560

0.1891

0.0543