46--48. Consider these actual data showing market shares of Breakfast Cereal man

Question

46--48. Consider these actual data showing market shares of Breakfast Cereal manufacturers:

Top Cereal Producers
Market share for 1999, 2005, 2008, and 2011.
Figures are rounded to the nearest point.
Manufacturer 1999 2005 2008 2011
Kellogg's 32% 32% 33% 32%
General Mills 31% 26% 25% 28%
Post 16% 15% 15% 13%
Private Labels 8% 14% 14% 15%
Quaker Oats 9% 6% 7% 7%
Malt-O-Meal 3% 5% 5% 6%
All Other 0% 0% 1% 0%

46. What is the Herfindahl-Hirschman index for the industry in 2011? _______
47. Based on the general framework we discussed in class, would the Justice Department and Federal Trade Commission consider this industry: concentrated; not-concentrated?
(Circle your choice)
48. Assuming that it were allowed: If Post acquired Quaker Oats the Herfindahl index for this industry would increase by ___________.

Explanation / Answer

46. Herfindahl-Hirschman index= .32ˆ2 + .28ˆ2 +.13ˆ2+ .15ˆ2+ .07ˆ2+ .06ˆ2 = .2287 47. concentrated 48. New Herfindahl-Hirschman index = .32ˆ2 + .28ˆ2 +.20ˆ2+ .15ˆ2+ .06ˆ2 = .2469 it would increase by .2469 - .2287 please rate appreciated

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