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An industry consists of three firms with sales of $230,000, $760,000, and $200,000.
a. Calculate the Herfindahl-Hirschman index (HHI).
Instruction: Round to the nearest integer.
b. Calculate the four-firm concentration ratio (C4).
c. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, is the Department of Justice likely to attempt to block a horizontal merger between two firms with sales of $230,000 and $200,000?
Market analysts often use cross-price elasticities to determine a measure of the competitiveness of a particular good in a market.
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