Dorchester County has the following five banks in its market area:
$\begin{array} { l c }
\text { Bank } & \text { Total Assets } \
\text { First National Bank, NA } & \$ 1,500 \text { million } \
\text { Dorehester County Bank } & \$ 750 \text { million } \
\text { First State Bank } & \$ 500 \text { million } \
\text { Summerfield Bank } & \$ 250 \text { million } \
\text { Charlestown Bank } & \$ 250 \text { million } \
\text { All Banks } & \$ 3,250 \text { million }
\end{array}$
-There are 10 banks in a particular market area,all with a market share of 10 percent.Two of the banks plan to merge and the Herfindahl-Hirschman Index moves from 1,000 to 1,200.The Justice Department:

Question

Dorchester County has the following five banks in its market area:
$\begin{array} { l c } 
\text { Bank } & \text { Total Assets } \
\text { First National Bank, NA } & \$ 1,500 \text { million } \
\text { Dorehester County Bank } & \$ 750 \text { million } \
\text { First State Bank } & \$ 500 \text { million } \
\text { Summerfield Bank } & \$ 250 \text { million } \
\text { Charlestown Bank } & \$ 250 \text { million } \
\text { All Banks } & \$ 3,250 \text { million }
\end{array}$
-There are 10 banks in a particular market area,all with a market share of 10 percent.Two of the banks plan to merge and the Herfindahl-Hirschman Index moves from 1,000 to 1,200.The Justice Department:

Quizplus · Accepted Answer

The increase in the Herfindahl-Hirschman Index from 1,000 to 1,200 indicates a moderate increase in market concentration. The Justice Department may raise competitive concerns depending on the specific circumstances of the merger. Therefore, option C is the correct answer. Options A, B, and D are incorrect because they do not accurately reflect the potential impact of the merger on market concentration, while option E is not necessary at this stage as the Justice Department may only raise concerns and may not necessarily block the merger.

Dorchester County Has the Following Five Banks in Its Market