Suppose Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion....

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Economics

Suppose Fiat recently entered into an Agreement and Plan ofMerger with Case for $4.3 billion. Prior to the merger, the marketfor four-wheel-drive tractors consisted of five firms. The marketwas highly concentrated, with a Herfindahl-Hirschman index of2,685. Caseâ€™s share of that market was 9 percent, while Fiatcomprised just 5 percent of the market. If approved, by how muchwould the postmerger Herfindahl-Hirschman index increase? Basedonly on this information, is the Justice Department likely tochallenge the merger according to the Horizontal Merger Guidelines?No. Yes. Possibly - but other factors will be considered

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The Post Merger HerfindahlHirschman index will increase by 90 Points Explanation HerfindahlHirschman index or simply the HH Index measures a markets level of competitiveness based on the number of firms participating in the industry HH Index See Answer

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