The following table provides market share information about the soft-drink industry. Review anti-trust laws and the merger guidelines under Chapter...
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1. The following table provides market share information about the soft-drink industry. Review anti-trust laws

and the merger guidelines under Chapter 15: "Monopoly and Antitrust Policy" and conduct your own research on U.S. anti-trust laws in the Online Library or the internet to answer the following questions.


Company

Market Share

Coca-Cola

37%

Pepsi-Co

35%

Cadbury Schweppers

17%

Other

11%

a.   Apply the Herfindahl-Hirschman Index (HHI) market concentration rules that guide mergers between companies to prevent monopoly creation and to promote competition among firms. Based on the market shares of the companies in the table, the merger of which companies will be highly concentrated? What ethical rules will be affected based on U.S. anti-trust laws and merger guidelines in regard to a highly concentrated market?


b.   Do you think the Department of Justice and the Federal Trade Commission would approve a merger between any two of the first three companies listed in the table based U.S. merger guidelines and anti-trust laws? Explain.



c.   Do you think this market has barriers to entry? If yes, what might be the market barriers?

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