The bicycle industry consists of seven firms. Firms 1, 2, 3, 4 each has 10% market share,

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The bicycle industry consists of seven firms. Firms 1, 2, 3, 4 each has 10% market share, and firms 5,6,7 each has 20% market share. Using the concentration measures, answer the following questions:

(i) Calculate 4-firm concentration ratio for this industry.

(ii) Calculate the Herfindahl-Hirschman index (HHI) for this industry.

(iii) Now, suppose that firms 1 and 2 merge, so that the new firm will have a market share of 20%.

1) Calculate the post merger I(x)

2) Calculate the change in the I(x) caused by the merger.

3) Will this merger be challenged in the U.S.? In Canada?

Related Book For answer-question

Elementary Statistics

ISBN: 978-0321691231

8th edition

Authors: Neil A. Weiss

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Posted Date: Feb 15, 2019 09:11 AM

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The bicycle industry consists of seven firms. Firms 1, 2, 3, 4 each has 10% market share,

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A 4 firm concentration ratio sum of market share of top 4 firms2020201070 B H... View the full answer

Elementary Statistics

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