You are the manager in a market composed of 11 firms, each of which has a 9.09 percent market share. In addition, each firm has a strong financial position and is located within a 100-mile radius of its competitors. Instruction: Enter your responses rounded to the nearest penny (two decimal places). a. Calculate the premerger (HHI) for this market. Herfindahl-Hirschman index
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- You are the manager in a market composed of eight firms, each of which has a 12.5 percent market share. In addition, each firm has a strong financial position and is located within a 100-mile radius of its competitors.Instruction: Enter your responses rounded to the nearest penny (two decimal places).a. Calculate the premerger Herfindahl-Hirschman index (HHI) for this market.b. Suppose that any two of these firms merge. What is the postmerger HHI?c. Based only on the information contained in this question and on the U.S. Department of Justice Horizontal Merger Guidelines described in this chapter, do you think the Justice Department would attempt to block a merger between any two of the firms?multiple choice It likely will not. It may, but will likely consider other factors as well. It likely will.You are the manager in a market composed of eight firms, each of which has a 12.5 percent market share. In addition, each firm has a strong financial position and is located within a 100-mile radius of its competitors. a. Calculate the premerger Herfindahl-Hirschman index (HHI) for this market. b. Suppose that any two of these firms merge. What is the postmerger HHI?The petrol industry in Dubai has become increasingly concentrated in recent decades. The number of firms in the industry has dropped by 40 per cent since 1999 peak, while the remaining firms "swelled in size." In order to enter the industry , the owners of the companies must have significant capital at their disposal and they consider the impact of their decisions on competitors and the reaction of their competitors on themselves. Older firms tend to rest on their laurels, having little incentivw to innovate. They spend less on research and development, and instead acquire growth through mergers or acquisitions and expand margins by raising prices on consumers. As at 2020, Cyril Tech has become the largest player in the market providing 80 per cent of the petrol output. The remaining players control 20 per cent of the output. A. State what market structure existed in the petrol industry SUBSEQUENT to 1999. Can excess profit be earned in this industry in the long run. Explain B. State…
- You are the manager in a market composed of eight firms, each of which has a 12.5 percent market share. In addition, each firm has a strong financial position and is located within a 100-mile radius of its competitors. a. Calculate the premerger Herfindahl-Hirschman index (HHI) for this market. b. Suppose that any two of these firms merge. What is the postmerger HHI? c. Based only on the information contained in this question and on the Horizontal Merger Guidelines described in this chapter, do you think the Justice Department (or FTC) would attempt to block a merger between any two of the firms? ExplainWhat is the, HHI, Herfindahl-Hirschman Index for an industry where six companies each have a market share of 15% and one company which has a market share of 10%?You are the manager in a market composed of 12 firms, each of which has a 8.33 percent market share. In addition, each firm has a strong financial position and is located within a 100-mile radius of its competitors. Instructions: Enter your responses rounded to the nearest penny (two decimal places). a. Calculate the premerger Herfindahl-Hirschman index (HHI) for this market. b. Suppose that any two of these firms merge. What is the postmerger HHI? c. Based only on the information contained in this question and on the U.S. Department of Justice Horizontal Merger Guidelines described in this chapter, do you think the Justice Department would attempt to block a merger between any two of the firms? O It may but will also consider other factors O It likely will not O It likely will
- A company, say Afghan Saffron, is considering entering the Iranian’s market which is dominated by its principal rival, say Iranian Saffron. Clearly, Afghan Exporters decision to enter or not will be judged on the potential profitability of such a move. This, in turn, depends upon the way Iranian will react to such a business move by Afghan Exporters. If Iranian reacts aggressively by launching a big commercial campaign, then an entry by Afghan Saffron Exporters will result to a loss of $2.8 million for Afghan Saffron Exporters and a loss of $2.2 million for Iranian Manufacturers. If, on the other hand, Iranian accommodates Afghan Saffron exporter’s entry, then both Afghan and Iranian will be making profits of $1 million and $1 million, respectively. Finally, if Afghan Exporter does not enter the market at all, then Iranians will be making monopoly profits of $3.5 million”. Requirements: a) What would you do if you were the CEO of Afghan Saffron Exporter and Why, Explain briefly-use any…You are the manager in a market composed of 20 firms, each of which has a 5.00 percent market share. In addition, each firm has a strong financial position and is located within a 100-mile radius of its competitors. a. Calculate the premerger Herfindahl-Hirschman index (HHI) for this market? b. Suppose that any two of these firms merge. What is the postmerger HHI? c. Based only on the information contained in this question and on the U.S. Department of Justice Horizontal Merger Guidelines described in this chapter, do you think the Justice Department would attempt to block a merger between any two of the firms?multiple choice It may but will also consider other factors. It likely will not. It likely will.Industry A is composed of three firms. One has an 80% market share, and the other two have a 10% share each. The Herfindahl index for this industry is:
- Scenario: Madison Company is a large manufacturer and distributor of cake supplies. It is based in Chicago(Headquarters) and Trinidad. It sends supplies to firms throughout the United States and the UnitedKingdom. It markets its supplies through periodic mass mailings of catalogs to those firms. Itsclients can make orders over the phone and Madison ships the supplies upon demand.The main competition for Madison’s in the United States comes from one U.S. firm and oneCanadian firm. A British firm has a small share of the U.S. market but is at a disadvantagebecause of its distance. The British firm’s marketing and transportation costs in the U.S. marketare relatively high. Given that one-third of the company sales are exported to the United Kingdom and invoices forexports are in US dollars, the demand for its exports is highly sensitive to the value of the Britishpound. In order to maintain its inventory at a proper level, it must forecast the total demand for itsproducts which is…1. Two firms (A and B) play a competition game (i.e. Cournot) in which they can choose any Qi from 0 to ¥. The firms have the same cost functions C(Qi) = 10Qi + 0.5Qi2, and thus MCi = 10 + Qi. They face a market demand curve of P = 220 – (QA + QB). a. Assume firm A chooses quantity first. Frim B observes this choice and then chooses its own quantity. What is Frim B's profit as a function of QA and QB? b. Firm B has MRB = 220 – 2QB – QA. What is firm B’s best response to an arbitrary QA selected by firm A? c. Given that firm A expects firm B’s best response, what is firm A’s profit as a function of QA? (Hint: the only unknown variable in the profit function should be QA) d. Firm A has MRA = 150 – 4QA/3. What are the equilibrium QA and QB selected in this game? e. What is the equilibrium price, and how much profit does each firm collect?The petrol industry in Dubai has become increasingly concentrated in recent decades. The number of firms in the industry has dropped by 40 per cent since a 1999 peak, while the remaining firms “swelled in size.” In order to enter the industry, the owners of the companies must have significant capital at their disposal and they consider the impact of their decisions on competitors and the reactions of their competitors on themselves. Older firms tend to rest on their laurels, having little incentive to innovate. They spend less on research and development, and instead acquire growth through mergers or acquisitions and expand margins by raising prices on consumers. As at 2020, Cyril Tech has become the largest player in the market providing 80 per cent of the petrol output. The remaining players control 20 per cent of the output. a) State what market structure existed in the petrol industry subsequent to 1999. Can excess profit be earned in this industry in the long run. Explain.b) State…