Zyon pharma is a small company that specializes in contact lenses. They purchase another company that specializes in contact lens solution. This is an example of Selective merger None of the above Horizontal merger Vertical merger
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- The Department of Justice and the Federal Trade Commission use the HI calculation for a market to evaluate proposed horizontal mergers. For example, if the post-merger HHI is below ——- , then the market is not concentrated, so mergers in them are not challenged; however, at the other extreme, if the post-merger HHI is above ——- then the market is highly concentrated, and mergers that increase the HHI by 100 to 200 points may be challenged and mergers that increase the HHI by more than 200 points will likely be challenged. (Enter your responses as integers.)Categorize each of the following examples as a horizontal, vertical, or conglomerate merger.Axon pharma specializes and is the market leader in vaccines. They decide to acquire another company that specializes in cancer drugs. This is an example of: Vertical merger Horizontal merger Diagonal merger None of the above
- Economists believe mergers can sometimes achieve greater efficiency than two companies that do not merge. true or falseWhich of the following would be most in line with how economists believe modern analysis of mergers should be done? Group of answer choices Mergers should never be allowed if the HHI (Herfindahl-Hirschman Index)increases by more than 300. Regulators should use the most narrow definition of a market when evaluating mergers. Regulators should us the most broad definition of the market when evaluating mergers. Regulators should evaluate how the merger will change the way firms act and how this will impact consumers.16-1. Two equal sized newspaper have an overlap in circulation of 10% (10% of the subscribers subscribe to both newspaper). Advertisers are willing to pay $10 to advertise in one newspaper but only $19 to advertise in both , because they’re are unwilling to pay twice to reach the same subscribers. What’s the likely bargaining negotiation outcome if the advertisers bargain by telling each newspaper that they’re going to reach an agreement with the other newspaper so the gains to reaching agreement are only $9? Suppose the two newspaper merge. What is the likely post merger bargaining outcome?
- There are two types of risk: systematic and non-systematic. Do you believe that a merger's diversification objective could help to mitigate both forms of risk? Justify your response.Nationwide Bank has approached Hometown Bank with a proposal to merge. The following table lists the sales of the banks in the area. Use this information to calculate the Herfindahl-Hirschman index. Based on the FTC and DOJ Horizontal Merger Guidelines, do you think the Justice Department is likely to challenge the proposed merger?I was hoping I could have some help on parts c-e of this problem I’m getting a little stuck on making sure my values are correct given this this is a cournot duopoly model.
- Nationwide Bank has approached Hometown Bank with a proposal to merge. The following table lists the sales of the banks in the area. Use this information to calculate the four-firm concentration ratio and the Herfindahl-Hirschman index. Based on the FTC and DOJ Horizontal Merger Guidelines, do you think the Justice Department is likely to challenge the proposed merger?A market has 3 firms. Firm 1 has 37%, firm 2 has 17% and firm 3 has 46% of the total market share. If firm 1 and firm 2 were to merge, calculate the pre- merger and post-merger Hirschmann-Herfindahl Index in the market. If these 3 firms were based in the US, would this merger likely be challenged by the US Department of Justice? If these 3 firms were under the jurisdiction of the European Commission, what criteria could the European Commission use to argue that firm 1 and 2 should not be allowed to merge? 5.Match the definition to each term listed below. Number 1 2 3 4 5 6 7 8 9 10 11 Definition A table that shows the payoffs each firm earns from every combination of firm strategies An agreement among firms to charge the same price or otherwise not to compete An option that is better than any alternative option regardless of what the other firm does An outcome of a strategic game from which neither rival wants to deviate A game outcome in which players seek to increase their mutual payoff A practice where one firm initiates a price change and the other firms follow the leader A game in which the firms choose their strategies at the same time One firm's gain must equal the other firm's loss A game in which the sum of Firms select their optimal strategies in a single time period without regard to possible interactions in subsequent time periods A game that occurs more than once the two firms' outcomes is positive Instructions: Enter a numeric response corresponding to the number of the…