$\begin{array}{lr}
\begin{array}{c}
\text { Pool Sweeper } \
\text { Producer }
\end{array} & \begin{array}{c}
\text { Output } \
\text { (Revenue) }
\end{array}
& \begin{array}{c}
\text {Market Share}\
\text {(Percent)} \
\end{array} \
\text { North Star } & \$ 20,000 &\underline{\quad\quad}\
\text { Hurricane } & \$ 16,000 &\underline{\quad\quad}\
\text { Blue Lagoon } & \$ 2,000 &\underline{\quad\quad}\
\text { Clean Sweep } & \$ 2,000&\underline{\quad\quad}
\end{array}$

$\text { Table } 25.2$ Refer to Table 25.2.Assume there are only four firms in the pool sweeper industry.The U.S.Justice Department would most likely
A)Allow a merger between North Star and Blue Lagoon.
B)Allow a merger between Hurricane and Blue Lagoon.
C)Allow a merger between Blue Lagoon and Clean Sweep.
D)Not allow any mergers among firms in this industry.

Question

$\begin{array}{lr}
\begin{array}{c}
\text { Pool Sweeper } \
\text { Producer }
\end{array} & \begin{array}{c}
\text { Output } \
\text { (Revenue) }
\end{array} 
 & \begin{array}{c}
 \text {Market Share}\
 \text {(Percent)} \
\end{array} \ 
 \text { North Star } & \$ 20,000 &\underline{\quad\quad}\
\text { Hurricane } & \$ 16,000 &\underline{\quad\quad}\
\text { Blue Lagoon } & \$ 2,000 &\underline{\quad\quad}\
\text { Clean Sweep } & \$ 2,000&\underline{\quad\quad}
\end{array}$

$\text { Table } 25.2$  Refer to Table 25.2.Assume there are only four firms in the pool sweeper industry.The U.S.Justice Department would most likely
A)Allow a merger between North Star and Blue Lagoon.
B)Allow a merger between Hurricane and Blue Lagoon.
C)Allow a merger between Blue Lagoon and Clean Sweep.
D)Not allow any mergers among firms in this industry.

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) for the pool sweeper industry is already high at 2,950. Therefore, any mergers among the existing firms will likely result in an even higher concentration in the industry, which is likely to be viewed as anti-competitive by the U.S. Justice Department. Thus, the most likely course of action would be to not allow any mergers among the firms in this industry.

Table 25.2\text { Table } 25.2 Table 25.2 Refer to Table 25

$\text { Table } 25.2$ Refer to Table 25