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ECON 414 Assignment




Question;Based only on the knowledge that the premerger market share of two firms proposing to merge was 30 percent each, an economist working for the justice department was able to determine that, if approved the postmerger HHI will increase by 1800. How was the economist able to draw this conclusion without knowledge of the other firm?s market shares? From this information, can you devise a general rule explaining how the Herfindahl- Hirschman Index is affected when exactly two firms in the market merge?


Paper#55861 | Written in 18-Jul-2015

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