Which of the following findings would be the most likely to lead the U.S. Justice Department to block a corporate merger under terms of the Clayton Act?
A)a buyer-seller relationship between the two firms
B)a high pre-merger Herfindahl index in the industry and a large boost in the index because of the merger
C)a low pre- and post-merger concentration ratio in the industry
D)evidence that one of the firms is highly unprofitable

Question

Quizplus · Accepted Answer

The Clayton Act is designed to prevent anticompetitive mergers that could lead to decreased competition and increased prices for consumers. A high pre-merger Herfindahl index indicates that the industry is already concentrated, and a large boost in the index because of the merger suggests that the merger would significantly reduce competition, which is a primary concern under the Clayton Act.

Which of the Following Findings Would Be the Most Likely