Problem II. Nationwide Bank has approached Hometown Bank with a proposal to merge. The following table lists the sales of the banks in the area. Bank Name Urban Bank MegaBank Hometown Bank Bulk Bank Nationwide Bank Metropolitan Bank City Bank American Bank Atlantic Savings |Sales (in millions of US dollars) 540 1,500 660 1,065 1,245 880 1,350 710 1.185 1. Based on the information on the table above, calculate the four- firm concentration ratio and the Herfindahl-Hirschman index in the current market. 2. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, do you think the Justice Department is likely to challenge the proposed merger? Explain your answer!

Problem II. Nationwide Bank has approached Hometown Bank with a proposal to merge. The following table lists the sales of the banks in the area. Bank Name Urban Bank MegaBank Hometown Bank Bulk Bank Nationwide Bank Metropolitan Bank City Bank American Bank Atlantic Savings |Sales (in millions of US dollars) 540 1,500 660 1,065 1,245 880 1,350 710 1.185 1. Based on the information on the table above, calculate the four- firm concentration ratio and the Herfindahl-Hirschman index in the current market. 2. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, do you think the Justice Department is likely to challenge the proposed merger? Explain your answer!

Algebra & Trigonometry with Analytic Geometry

13th Edition

ISBN:9781133382119

Author:Swokowski

Publisher:Swokowski

Chapter10: Sequences, Series, And Probability

Section: Chapter Questions

Problem 22T

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