Consider the following fictitious sales data (in thousands of dollars) for books sold both over the Internet and in physical retail establishments. Firms have numbers instead of names, and Firm 1 generates book sales only over the Internet. Antitrust authorities judge that a single firm possesses "monopoly power" if its share of sales in the relevant market exceeds 70 percent.

a. Suppose that the antitrust authorities determine that bookselling in physical retail stores and Internet bookselling are individually separate relevant markets. Does any single firm have monopoly power, as defined by the antitrust authorities?
b. Suppose that in fact there is really only a single book industry, in which firms compete both in physical retail stores and via the Internet. According to the antitrust authorities' measure of monopoly power, is there actually cause for concern?

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Internet Book Sales Book Sales in Physical Stores Combined Book Sales Firm Sales Firm Sales Firm Sales 2 $4,200 2,000 41,950 450 2 $4,250 2,050 2,000 750 500 Total $1,000 $9,000 $10,000