Assignment 4. • Suppose that a market consists of six firms with following market shares. Firm A = 25%, Firm B = 20%, Firm C = 20%, Firm D = 15%, Firm E = 10%, Firm F = 10% (1) Calculate H index. (2) If Firm D and Firm E are merged to become Firm D', calculate post-merger H index. (3) According to the Horizontal Merger Guideline of 2010, is this merger categorized as white, gray, or black?

Assignment 4 (1.) Calculation Of H Index: Firm A Market Share = 25% Firm B Market Share = 20% Firm C Market Share = 20% Firm D Market Share = 15% Firm E Market Share = 10% Firm F Market Share = 10% The H index is calculated as follows: = 252 + 202 + 202+152+102 + 102 = 625 + 400 + 400 + 225 + 100 +100 = 1,850 (2) If Firm D and Firm E are merged to become Firm D. Calculation of post-merger H index. Firm A Market Share = 25% Firm B Market Share = 20% Firm C Market Share = 20% Firm D Market Share = 25% (Assume that Firm D Market Share = 15% and Firm E Market Share = 10% are merged) Firm F Market Share = 10% The H index is calculated as follows: = 252 + 202 + 202+152+102 + 102 = 625 + 400 + 400 + 625 +100 Post-merger H index = 2,150 The change In H index = 2,150-1,850 = 300 Values of H Index lies between 100 to 10,000. Higher the Index, Higher the possibility of Merger. (3) According to the Horizontal Merger Guideline of 2010, is this merger categorized as white, gray, or black? Answer: Post Merger H index were between 1500 to 2500 and the H index were above 200 so, the merger categorized as GRAY as per Horizontal Merger Guideline of 2010.