An industry has four firms, each with a market share of 25 percent. There is no foreign competition, entry into the industry is difficult, and no firm is on the verge of bankruptcy. If two of the firms in the industry seek to merge, this action would most likely be opposed by the government because the Herfindahl index for the industry is Multiple Choice 2,500 and the merger would increase the index by 1000. 5,000 and the merger would increase the index by 2000. 3,000 and the merger would increase the index by 2000. 2,500 and the merger would increase the index by 1250
An industry has four firms, each with a market share of 25 percent. There is no foreign competition, entry into the industry is difficult, and no firm is on the verge of bankruptcy. If two of the firms in the industry seek to merge, this action would most likely be opposed by the government because the Herfindahl index for the industry is Multiple Choice 2,500 and the merger would increase the index by 1000. 5,000 and the merger would increase the index by 2000. 3,000 and the merger would increase the index by 2000. 2,500 and the merger would increase the index by 1250
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter16: Government Regulation
Section: Chapter Questions
Problem 2E
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An industry has four firms, each with a market share of 25 percent. There is no foreign competition, entry into the industry is difficult, and no firm is on the verge of bankruptcy. If two of the firms in the industry seek to merge, this action would most likely be opposed by the government because the Herfindahl index for the industry is
Multiple Choice
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2,500 and the merger would increase the index by 1000.
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5,000 and the merger would increase the index by 2000.
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3,000 and the merger would increase the index by 2000.
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2,500 and the merger would increase the index by 1250.
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