In January 2007, XM enjoyed about 58 percent of satellite radio subscribers, and Sirius had the remaining 42 percent. Both firms were suffering losses, despite their dominance in the satellite radio market. In 2008, the DOJ decided not to challenge a merger, and these two firms united to become Sirius XM. If you were an economic consultant for Sirius, what economic arguments would you have presented to the DOJ to persuade it not to challenge the merger? Explain.

Question

Business

Evie Norton

18 November, 11:12

In January 2007, XM enjoyed about 58 percent of satellite radio subscribers, and Sirius had the remaining 42 percent. Both firms were suffering losses, despite their dominance in the satellite radio market. In 2008, the DOJ decided not to challenge a merger, and these two firms united to become Sirius XM. If you were an economic consultant for Sirius, what economic arguments would you have presented to the DOJ to persuade it not to challenge the merger? Explain.

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Answers (1)

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Lorelei Stone · Answer 1

It is the best option to merge these two stations because the listeners listen to only these two stations.

Explanation:

I would have told the DOJ that since XM radio has about 58% percent of the radio audience members, and our organization just has 42%, that it is astute to converge with the opposition in the event that we are sufficiently fortunate to be given the chance. Cleary XM is planning something directly for convince radio audience members to hear them out so why not go along with them and gain from them.

Additionally since practically 100% of satellite radio audience members exist in these two organizations, it would be an awesome plan to consolidate them as that would give us a 100% possibility of getting audience members to tune in to our blended companie's stations.