Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 10

In January 2007, X M enjoyed about 58 percent of satellite radio subscribers, and Sirius had the remaining 42 percent. Both firms were suffering losses, despite their dominance in the satellite radio market. In 2008, the DOJ decided not to challenge a merger, and these two firms united to become Sirius XM. If you were an economic consultant for Sirius, what economic arguments would you have presented to the DOJ to persuade it not to chal­lenge the merger? Explain.