If an industry initially has an HHI of 1,250, a merger between two of the largest (in terms of market share) firms in the industry:
A) would be allowed to occur, since it would increase the competitive nature of the industry.
B) would not likely be allowed, since it most likely would reduce the competitive nature of the industry.
C) would be allowed, since this HHI represents a strongly competitive industry.
D) is likely to be allowed, since it moves the industry toward a socially optimal level of output.
Correct Answer:
Verified
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