The Herfindahl-Hirschman Index is one factor used to determine whether a merger between two firms should be allowed.Which of the following statements regarding the value of the Index for a given industry is true?
A)If a merger would result in an Index value less than 1,000, the merger would not be challenged.
B)If a merger would result in an Index value of 1,000 or more, the industry would be considered a monopoly and the merger would be challenged.
C)If a merger resulted in an Index of between 1,000 and 1,800, the industry would be considered competitive and the merger would not be challenged.
D)If a merger would increase the Index by 100, the industry would be considered a monopoly and the merger would be challenged.

Question

Quizplus · Accepted Answer

If a merger results in an HHI value less than 1,000, the industry is considered unconcentrated, and the merger is unlikely to be challenged.

The Herfindahl-Hirschman Index Is One Factor Used to Determine Whether