transportation costs are insignificant, the
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geographic market is frequently defined as the entire nation. Or where a firm and its
rivals sell their product only in a limited geographic area and their customers have no
ready access to an outside source of supply, the general rule has been to define the
geographic market as that particular area and to include only the sales made within the
market. Where the seller's geographic market is less certain, attention is paid not only to
actual sales patterns but also to price relationships and movements in different areas. In
sum, the relevant geographic market in competition analysis is that "section of the
country" where a firm can increase its price without attracting new sellers or without
losing many customers to alternative suppliers outside that area.
(2) Market Structure and Market Power
Required Statistical Information
? Market Share of Each Concerned Firm in Each Geographical Market
? Average Market Shares in Each Geographical Market
? Four-Firm Concentration Levels and HHI
? Industry Price-Cost Margin
? Price Cost Margin by Each Concerned Firm
? Imports of Concerned Goods
(a) Market Share
Market shares are antitrust's chief tool for assessing the competitive significance of
firms in the relevant market. Market shares most often are calculated by setting the
concerned industries' historical output (measured in production units or sales) as the
numerator and then dividing that by the larger denominator constituting total production
or sales in the defined area.
(b) Concentration measures
To quantify oligopolitical concentration effects, the Herfinadahl-Hirschman Index
(HHI) for leading firms market share measures of concentration. The ...