Question 31 (8 points) Bayer and Monsanto are two large firms that both worked in agriculture, particularly in genetically modified seeds. They were permitted to merge. By merging, the HHI for herbicide-resistant traits in GM cotton seeds went from 6,600 to 9,600 and the HHI for GM cotton seeds in general rose by 1,500 to 4,100. a. According to the simple US Dept of Justice, should this merger have been allowed? Why or why not? (3) b. What should happen to the Lerner index as a result? And to the price of seeds? (2) c. The firms argued that they could lower the cost to farmers as a result of the merger- explain why this argument has merit. (3) Question 31 (8 points) Bayer and Monsanto are two large firms that both worked in agriculture, particularly in genetically modified seeds. They were permitted to merge. By merging, the HHI for herbicide-resistant traits in GM cotton seeds went from 6,600 to 9,600 and the HHI for GM cotton seeds in general rose by 1,500 to 4,100. a. According to the simple US Dept of Justice, should this merger have been allowed? Why or why not? (3) b. What should happen to the Lerner index as a result? And to the price of seeds? (2) c. The firms argued that they could lower the cost to farmers as a result of the merger- explain why this argument has merit. (3)