1. Math
2. Statistics And Probability
3. suppose that in the market for hospital gowns in a...

# Question: suppose that in the market for hospital gowns in a...

###### Question details

Suppose that in the market for hospital gowns in a metropolitan area there are ten companies supplying the gowns. The sales of those ten companies are listed below:

 Company Annual Sales A 3,072 B 6,124 C 10,901 D 7,878 E 6,540 F 1,289 G 9,632 H 4,454 I 7,612 J 13,107
1. Calculate the Herfindahl index in this local market for hospital gowns.

2. At the end of the fiscal year, company J plans to acquire companies F and I. Assume that the sales of companies A, B, C, D, E, G, and H grow by 2% (round to the nearest whole number) but that the sales that were being made by companies F and I stay the same. Company J not only acquires companies F and I but also has growth at 5% rather than 2%. Calculate the new Herfindahl index.

1. Based on your findings, do you think there will be regulatory pressure to prevent the acquisition?