Question

11. You work at a firm on Wall Street that specializes in mergers, and you are the team leader in charge of getting approval for a merger between two major beer manufacturers in the United States. While Table 7-2 in the text indicates that the four-firm concentration ratio for the 494 breweries operating in the United States is 91 percent, your team has put together a report suggesting that the merger does not present antitrust concerns even though the two firms each enjoy a 15 percent share of the U.S. market. Provide an outline of your report

Answer 1

Answer:

The four-firm concentration ratios in Table 7-2 are likely to overstate the level of concentration in the U.S. Imported beers account for much of the sales in the U.S. It is likely that the brewing industry is much less concentrated than Table 7-2 leads us to believe