ESSAY. Write your answer in the space provided or on a separate sheet of paper.146) a.What is the difference between a horizontal merger and a vertical merger?b.Give an example of each type of merger.c.Could a horizontal merger be welfare improving?
Diff: 2Page Ref: 503-504/503-504Topic: MergersLearning Outcome: Micro 14: Discuss production and pricing decisions within monopolies and how public policies affectmonopoliesAACSB: Reflective Thinking147) Consider two industries, industry Q and industry Z. In industry Q there are 10 companies, each with a marketshare of 10% of total sales. In industry Z, there are eight companies. One company has a 65% market share andeach of the other seven firms has a market share of 5%.a.Calculate the four-firm concentration ratio for each industry.b.Calculate the Herfindahl-Hirschman Index (HHI) for each industry.c.What do the values of the two concentration measures imply about the degree of market power in the twoindustries?