Question

firms	market share %	HHI<2100	HHI aftrer Lg &HTC merger	HHI after huawei & nokia merger
samsung	30
apple	24
huawei	16
LG	15
yota	5
htc	4
motorola	3
nokia	2
others	1
total	100

1. What is the value of HHI Index of this market? Support the answer with calculations.
   
2. If LG wants to merge with HTC, then will US Justice Department block this merger if its guidelines state that HHI Index must be equal to 2100 for this industry to be competitive? Support the answer with calculations.
   
3. Will US Justice Department challenge the merger of Huawei and Nokia under the same guidelines? Support the answer with calculations.
   
4. Would Apple initiate a price reduction for its phones if it is 95% sure that the rivals will do the same, which could result in a potential $75,000 loss or in potential profit of $1.2 million if the price cut is not matched? Support the answer with calculations.

Answer 1