Question

please complete chart

ram producing firms	market share %	HHI index value	HHI Index crucial + Geil Merger	HHI index PQI + OCZ +PNY Merger
Kingston	20
corsair	18
crucial	15
geil	14
PQI	10
OCZ	8
PNY	6
Micron	5
others	4
total	100	HHI =	HHI =	HHI =

a. What is the value of HHI Index of this market? Suppport the answer with calculations in table's third column

b. If Crucial wants to merge with Geil, then will the US Justice department challenge this merger if its guidelines state that HHI index must be equal to 1800 for this industry to be competitive? Will US Justice Department challenge the merge of PQI, OCZ and PNY underssame guidelines? Support the answers with calculations in tables's fourth and fifth column.

c. Would Corsair initiate a price reduction per unit of its output if it is 90% sure that the rivals will do the same, which could result in a potential $150,000 loss or in a potential profit of $1 million of the price cut is not matched? Support the answer with calculations.

Answer 1