Given the market shares below, calculate the Herfindah-Hirschman Index (HHI). Would the Federal Trade Commission approve a merger between GM and Ford? Company Market Share (in Percent) GM 21 Ford 19 Toyota 16 Chrysler 13 Nissan 9 Hyundai 7 Kia 6 Subaru 5 Volkswagen 4

Given the market shares below, calculate the Herfindah-Hirschman Index (HHI). Would the Federal Trade Commission approve a merger between GM and Ford? Company Market Share (in Percent) GM 21 Ford 19 Toyota 16 Chrysler 13 Nissan 9 Hyundai 7 Kia 6 Subaru 5 Volkswagen 4

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter11: Monopoly And Antitrust Policy

Section: Chapter Questions

Problem 36P: Use Table 11.5 and Table 11.6 to calculate the Herfindal-Hirschman Index for the U.S. auto market....

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Question

6. Given the market shares below, calculate the Herfindah-Hirschman Index (HHI). Would the Federal Trade Commission approve a merger between GM and Ford?
Company

Market Share (in Percent)

Ford

Toyota

Chrysler

Nissan

Hyundai

Kia

Subaru

Volkswagen

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Step 1: Define Herfindahl-Hirschman Index

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Step 2: Calculate the HHI

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Step 3: Explain the criteria adopted by Federal Trade Commission to approve a merger

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Step 4: Discuss whether FTC will approve the merger between GM and Ford

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