Consider the data from Problem 27-11. Suppose that antitrust authorities have determined that there are separate relevant markets for e-books and physical books. In addition, these authorities perceive that a monopoly situation exists that can be challenged on legal grounds if the value of the Herfindahl-Hirschman Index exceeds 5,000. On the basis of this criterion, do the antitrust authorities conclude that there are grounds for a legal challenge in either market? Explain.

In problem 27-11

E-Book Sales Phvsical Book Sales Combined Book Sales Firm Sales Firm Sales Firm $750 50 50 50 50 50 $1,000 $4,200 2,000 1,950 450 400 Sales $ 4,250 2,050 2,000 750 500 450 $10,000 4 4 4 Total $9,000