A market has ten firms, whose market shares are given in the table above
a) If firms I and J wanted to merge, according to the Department of Justice guidelines, would the Department of Justice challenge the merger? b) If firms A and B wanted to merge, according to the Department of Justice guidelines, would the Department of Justice challenge the merger?
a) The decision whether to challenge the merger depends, in part, on the market's Herfindahl-Hirschman Index (HHI). The HHI for the market initially is 1,150. Thus the Department of Justice guidelines say it will challenge a merger if the merger raises the HHI by 100 or more points. If firms I and J merge, the HHI becomes 1,200. The Department of Justice will not challenge this merger.
b) If firms A and B merge, the HHI becomes 1,600. The Department of Justice will challenge this merger.
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A venture capital fund wants to invest $1000 in each of one thousand mad scientists
The first scientist applying to the fund is working on the legendary pill that turns water into gasoline, and the second scientist is working on the even more legendary perpetual motion machine. The smart venture capitalist here will A) back the pill and look for 999 other scientists working on the same pill. B) back the machine and look for 999 other scientists working on the same machine. C) look for 500 scientists working on the pill and 500 working on the machine. D) back the pill, the machine, and 998 other different projects.
Why would illegal immigration have an effect on the prices of goods and services produced by illegal workers? Who benefits from these lower product and service prices?
What will be an ideal response?