Company Market share (percent) Dr Pepper 7-Up Calculate the Herfindahl–Hirschman Index (HHI) for the industry as it was structured in 1986 Calculate the postmerger HHI if only PepsiCo had bought 7-Up Calculate the postmerger HHI if only Coca-Cola had bought Dr Pepper How would you expect the Justice Department to respond to each merger considered separately? To both? (By the way, the proposed mergers were challenged, and neither was completed.) [1] See Carolyn Cox and Susan Foster, “The Costs and Benefits of Occupational Regulation,” Federal Trade Commission, October 1990, p 31 [2] W Kip Viscusi, “The Lulling Effect: The Impact of Protective Bottlecaps on Aspirin and Analgesic Poisonings,” American Economic Review 74(2) (1984): 324–27 Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 883