The measure used by the U.S. government to determine whether a merger should be allowed is the
A)price elasticity of demand.
B)price-cost margin.
C)Herfindahl-Hirschman index.
D)producer price index.
E)market size.

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman index (HHI) is the measure used by the U.S. government to determine whether a merger should be allowed. It measures the market concentration of a particular industry by taking the sum of the squared market shares of all the firms in the industry. A higher HHI score indicates a more concentrated industry, potentially indicating reduced competition after the merger. If the HHI score exceeds a certain threshold, typically 2,500, the government is more likely to block the merger.

The Measure Used by the U