Table 25.2 $$\begin{array} { | l | r | c | }
\hline { \text { Pool Sweeper } } & \text { Output (Revenue) } & \text { Market Share (\%) } \
\hline \text { North Star } & \$ 20,000 & \
\hline \text { Hurricarne } & \$ 16,000 & \
\hline \text { Blue Lagoon } & \$ 2,000 & \
\hline \text { Clean Sweep } & \$ 2,000 & \
\hline
\end{array}$$ Refer to Table 25.2.Assume there are only four firms in the pool sweeper industry.The U.S.Justice Department would most likely
A)Allow a merger between North Star and Blue Lagoon.
B)Allow a merger between Hurricane and Blue Lagoon.
C)Allow a merger between Blue Lagoon and Clean Sweep.
D)Not allow any mergers among firms in this industry.

Question

Table 25.2 $$\begin{array} { | l | r | c | } 
\hline { \text { Pool Sweeper } } & \text { Output (Revenue) } & \text { Market Share (\%) } \
\hline \text { North Star } & \$ 20,000 & \
\hline \text { Hurricarne } & \$ 16,000 & \
\hline \text { Blue Lagoon } & \$ 2,000 & \
\hline \text { Clean Sweep } & \$ 2,000 & \
\hline
\end{array}$$ Refer to Table 25.2.Assume there are only four firms in the pool sweeper industry.The U.S.Justice Department would most likely
A)Allow a merger between North Star and Blue Lagoon.
B)Allow a merger between Hurricane and Blue Lagoon.
C)Allow a merger between Blue Lagoon and Clean Sweep.
D)Not allow any mergers among firms in this industry.

Quizplus · Accepted Answer

The U.S. Justice Department would most likely not allow any mergers among firms in this industry because the industry is highly concentrated, with the top two firms having a combined market share of over 70%. A merger between any two of the four firms would further increase concentration and reduce competition in the industry.

Table 252 Refer to Table 25