Exhibit 25-3

-Refer to Exhibit 25-3. If Firms J, K, and L were to merge, the four-firm concentration ratio would ____________________ and the Herfindahl Index would _____________________.

Question

Exhibit 25-3
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-Refer to Exhibit 25-3. If Firms J, K, and L were to merge, the four-firm concentration ratio would ____________________ and the Herfindahl Index would _____________________.

Quizplus · Accepted Answer

The four-firm concentration ratio would increase because the merged entity would now account for a larger share of the market, combining the shares of Firms J, K, and L. The Herfindahl Index, which is the sum of the squares of the market shares of all firms in the industry, would also increase because the merger reduces the number of firms, increasing concentration.

Exhibit 25-3 ​

Exhibit 25-3