Economic Case study Question

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Reference the New York Times article, “Antitrust Suit Is Simple Calculus”, September 9, 2011 by James B. Stewart to answer the following questions:

 

http://www.nytimes.com/2011/09/10/business/att-and-t-mobile-merger-is-a-textbook-case.html?pagewanted=all

 

http://www.nytimes.com/2011/11/25/technology/att-deal-with-t-mobile-takes-a-step-back.html?pagewanted=all

 

What is the Herfindahl-Hirschman Index (HHI)?

How is it calculated?

What would the index be for a perfect monopoly?

According to the Justice Department Guidelines, what are the new guidelines under the current administration that deem an industry to be concentrated?

How much is the index ‘allowed’ to increase as the result of a merger?

With respect to the proposed merger between AT&T and T-Mobile how much will the index increase in local and national markets?

How does the Justice Department describe T-Mobile’s competitive role in the marketplace?

Why would they deem this to be important?

What did AT&T present to the Justice Department with respect to the price of wireless service to consumers after prior mergers in the marketplace?  

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