Reference no: EM13147790
1. You are the manager in a market composed of five firms, each of which has a 20 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 post merger 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? Explain.
2. Is "fairness" the economic basis for government laws and regulations designed to remedy market failures? If so, why; If not, what is the economic basis?
3. Between 1972 and 1981, Texaco sold gasoline to independent Texaco retailers at "retail tank wagon prices" but granted substantial discounts to distributors Gull and Dompier. Gull resold the gas under its own name. Dompier resold the gas under the Texaco brand name to retail stations and entered the retail market directly. Since neither Gull nor Dompier had significant storage facitlities, both distributors picked up gas directly from the Texaco plant and delivered it to their retail outlets. As a result, the sales volume increased substantially at the retail stations purchasing gas from these distributors, while independent Texaco retailers suffered the corresponding sales decline. In 1976, independent Texaco retailers filed against Texaco. In 1990, the Surpreme Court of the United States found that Texaco had indeed violated antitrust law. Which law do you think Texaco was found guilty of violating?
4. A well-known conglomerate that manufacturers a multitude of noncompeting consumer product instituted a corporate wide intiative to encourage its managers of its many divisions to shar consumer demographic information. However, since the initiative was implemented, the CEO has noticed that less information is available than ever. Why
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How did this omission hamper us economic growth
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Ford motor company spun off
: In 2000, Ford motor company spun off a subsidiary named Visteon, as well as several employees that went to work with Visteon. Visteon transferred some facilities, as well as these same employees, back to Ford in 2006. The employees were classified as..
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What rate of return did he make on the investment
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How many grams of o2 gas would occupy
: How many grams of O2 gas would occupy a 400.0 liter container when the temperature is 300.0 K and the pressure is 2.20 atm?
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Calculate the premerger herfindahl-hirschman index
: Calculate the premerger Herfindahl-Hirschman index (HHI) for this market and suppose that any two of these firms merge. What is the post merger HHI?
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In a limited partnership, when it is wound up
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Find maintenance cost in case of two repairmen on duty
: One man can fix a machine in four hours and two men working together can fix a machine in three hours. The total maintenance cost (including downtime cost) in the case of two repairmen on duty is:
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What is the cross price elasticity of apple sauce
: this leads to an increase in demand for apple sauce from 100 to 140 jars, what is the cross price elasticity of apple sauce and pork chops at a pork chop price of $6?
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Amount received within the discount period
: Prior to payment for the goods, the seller issues a credit memo for $750 to the customer for merchandise costing $425 that is returned. The correct amount is received within the discount period.
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