Economics 19th Edition by Stanley Brue, Cambell McConnell, Campbell McConnell, Sean Masaki Flynn, Sean Flynn

Exercise 2

Carrot Computers and its competitors purchase touch screens for their handheld computers from several suppliers. The six makers of touch screens have market shares of, respectively, 19 percent, 18 percent, 14 percent, 16 percent, 20 percent, anD¹3 percent.
a. What is the Herfindahl index for the touch screen manufacturing industry
b. By how much would a proposed merger between the two smallest touch screen makers increase the Herfindahl index Would the government be likely to challenge that proposed merger
c. If Carrot Computers horizontally merges with its competitor Blueberry Handhelds, by how much would the Herfindahl index change for the touch screen industry