2. An industry is composed of Firm 1, which controls 70% of the market, Firm 2 with 15% of the market, and Firm 3 with 5% of the market. About 20 firms of approximately equal size divide the remaining 10% of the market. Calculate the Herfindahl-Hirschman Index before and after the merger is 20%). Would you view a merger of Firm 2 with Firm 3 as procompetitive or anticompetitive? Explain.
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