If an industry has a premerger Herfindahl-Hirschman Index (HHI) of 2,499, the Justice Department will challenge the proposed merger if it adds more than ______ points to the HHI.
A) 50
B) 200
C) 1,000
D) 500

Question

Quizplus · Accepted Answer

The Justice Department typically challenges proposed mergers that increase the Herfindahl-Hirschman Index (HHI) by more than 200 points in markets where the premerger HHI is above 2,500. Since the premerger HHI in this scenario is 2,499, which is just below the threshold, a proposed merger that adds more than 200 points would likely be challenged.

If an Industry Has a Premerger Herfindahl-Hirschman Index (HHI) of 2,499