Suppose there are 6 firms in an industry with the following market shares.If the two smallest firms want to merge,how will the Federal Trade Commission reply?
Firm 1:30
Firm 2:25
Firm 3:25
Firm 4:10
Firm 5: 7
Firm 6: 3
A) The firms will be allowed to merge and compete with the larger firms.
B) The firms will be challenged because the merger will raise the HHI by more than 50 points.
C) The firms will not be allowed to merge.
D) The firms will be challenged because the merger will raise the HHI by more than 100 points.
E) The firms will be challenged because the merger will raise the HHI by more than 250 points.

Question

Quizplus · Accepted Answer

The Answer of Suppose there are 6 firms in an industry with the following market shares.If the two smallest firms want to merge,how will the Federal Trade Commission reply?
Firm 1:30
Firm 2:25
Firm 3:25
Firm 4:10
Firm 5: 7
Firm 6: 3
A) The firms will be allowed to merge and compete with the larger firms.
B) The firms will be challenged because the merger will raise the HHI by more than 50 points.
C) The firms will not be allowed to merge.
D) The firms will be challenged because the merger will raise the HHI by more than 100 points.
E) The firms will be challenged because the merger will raise the HHI by more than 250 points.

Suppose There Are 6 Firms in an Industry with the Following