Compute the herfindahl-hirschman index

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Reference no: EM1361432

An industry consists of three firms with sales of $200,000, $500,000, and $400,000.

a. Compute the Herfindahl-Hirschman index (HHI)

b. Calculate the four-firm concentration ratio (C4)

c. Based on the FTC and DOJ Horizontal Merger Guidelines, do you think the Department of Justice would attempt to block a horizontal merger between two firms with sales of $200,000 and $400,000? Explain.

Reference no: EM1361432

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