Two banks (Nationwide Bank and Hometown Bank) are contemplating the idea of merging. The following table...

 

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Two banks (Nationwide Bank and Hometown Bank) are contemplating the idea of merging. The following table lists the sales of the banks in the area. Bank Name Sales (in millions of US dollars) Urban Bank 540 Mega Bank 1,750 Hometown Bank 660 Bulk Bank 1,365 Nationwide Bank 1,745 Metropolitan Bank 880 City Bank 1.215 American Bank 860 Atlantic Savings 985 1. Based on the information on the table above, calculate the four-firm concentration ratio and Herfindahl-Hirschman Index in the current market 2. f nationwide bank and hometown bank were allowed to merge, what would be the HHI of the banking industry. Explain your answer! Two banks (Nationwide Bank and Hometown Bank) are contemplating the idea of merging. The following table lists the sales of the banks in the area. Bank Name Sales (in millions of US dollars) Urban Bank 540 Mega Bank 1,750 Hometown Bank 660 Bulk Bank 1,365 Nationwide Bank 1,745 Metropolitan Bank 880 City Bank 1.215 American Bank 860 Atlantic Savings 985 1. Based on the information on the table above, calculate the four-firm concentration ratio and Herfindahl-Hirschman Index in the current market 2. f nationwide bank and hometown bank were allowed to merge, what would be the HHI of the banking industry. Explain your answer!

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1 To calculate the fourfirm concentration ratio we need to sum the market shares of the four largest ... View the full answer