If the two smallest firms in a competitive market merged, the four-firm concentration ratio _______
Because _______.
A) would change; the degree of competition is notably diminished
B) would not change; especially high concentration ratios can benefit consumers
C) would change; the largest firms high concentration ratio is diminished
D) would not change; the degree of competition isn't notably diminished

Question

Quizplus · Accepted Answer

The four-firm concentration ratio would not change because the merger involves the two smallest firms, which are unlikely to significantly alter the market share held by the four largest firms, thus not notably diminishing the degree of competition.

If the Two Smallest Firms in a Competitive Market Merged