<p>In January 2007, XM enjoyed about 58% of satellite radio subscribers, and Sir

Question

<p>In January 2007, XM enjoyed about 58% of satellite radio subscribers, and Sirius&#160;had the remaining 42%. Both firms were suffering losses, despite their dominance in&#160;the satellite radio market. In 2008, the DOJ decided not to challenge a merge, and&#160;these two firms united become Sirius XM. If you were an economic consultant for&#160;Sirius, what economic arguments would you have presented to the DOJ to persuade&#160;it not to challenge the merger? Explain</p>

Explanation / Answer

I would have told the DOJ that since XM radio has about 58% percent of the radio listeners, and our company only has 42%, that it would be wise to merge with the competition if we are lucky enough to be presented with the opportunity. Cleary XM is doing something right to persuade radio listeners to listen to them so why not join them and learn from them? Also since almost 100% of satellite radio listeners lie within these two companies, it would be a very good idea to merge them as that would give us a 100% chance of getting listeners to listen to our merged companie's stations.

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