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    HHI Index

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    15. Nationwide Bank has approached Hometown Bank with a proposal to merge. The following table lists the sales of the banks in the area. Use this information to calculate the four-firm concentration ratio and the Herfindahl-Hirschman index. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, do you think the Justice Department is likely to challenge the proposed merger?
    Bank Name Sales (in millions)
    Mega Bank $900
    City Bank $850
    Nationwide Bank $735
    Atlantic Savings $555
    Bulk Bank $345
    Metropolitan Bank $340
    American Bank $265
    Hometown Bank $120
    Urban Bank $90

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    Dear Student,

    Please see the attached Excel for the answer. The Justice ...

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