Luminescent Silicon Corporation, which controls 40 percent of the com?puter-chip mar?ket in the United States, merges with Micro Processors, Inc., which controls 15 per?cent of the same market. Under the Clayton Act, this merger is

Question

Quizplus · Accepted Answer

The Clayton Act prohibits mergers that substantially lessen competition or tend to create a monopoly. This means that the merger is a violation if it results in a clearer concentration of the market, which it does since the merged company controls 55 percent of the market (40 percent from Luminescent Silicon Corporation and 15 percent from Micro Processors, Inc.). Additionally, the merger may make it more difficult for potential competitors to enter the market, making it a valid violation under the Clayton Act. Therefore, the correct answer is C.

Luminescent Silicon Corporation, Which Controls 40 Percent of the Com?puter-Chip