An industry in which there is a proposed merger has an Herfindahl-Hirschman Index (HHI) measurement of 3,000. The likely merger will raise the HHI by 100 points. This merger will
A) be approved.
B) be closely evaluated but not challenged.
C) be challenged because of the high initial HHI and the anticipated high postmerger increase in the HHI.
D) not be given approval.

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) is a measure of market concentration, and a value of 3,000 indicates a highly concentrated market. An increase of 100 points due to a merger in such a market would likely lead to antitrust concerns, making it probable that the merger would be challenged by regulatory authorities to prevent further concentration and preserve competition.

An Industry in Which There Is a Proposed Merger Has