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Problem 12: Determine whether the Justice Department
would challenge a merger between two firms in an industry
with 10 equal sized firms, based on its 1984 Herfindahl-
index guidelines only
Problem 13: Explain:
a) In what way the U.S. trucking industry exemplified the
capture theory hypothesis of government regulation prior to
the passage of the Motor Carrier Act of 1980 and
b) The result of the passage of the Motor Carrier Act in
1980.
Problem 15: From the following figure referring to natural
monopolist, indicate
a) The best level of output, price, and profit per unit and in
total for the monopolist
b) The best level of output and price with a lump sub tax
that would eliminate all monopolists profits
c) The best level of output, price and profits per unit and in
total with a $3 per unit tax collected from the monopolist,
and
d) The best level of output and profit per unit and in total if
the government sets the price of the product or service at
$10.