When is the Department of Justice less likely to allow a merger?
What will be an ideal response?
The Department of Justice (DOJ) reviews merger cases and decides whether the main objective is to increase market power or whether there are important efficiency gains from such a merger. One of the main approaches the DOJ adopts in its analysis of mergers is to calculate how concentrated an industry is. An industry is deemed concentrated when a few firms account for a large fraction of total sales in that industry. When a merger stands to increase concentration significantly, the DOJ is less likely to allow the merger.
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If the production possibilities frontier between bottled water and water in a jug is a straight line, which of the following statements would be correct?
A) Resources are equally productive at producing either product. B) There is no decrease in the production of one good when the production of the other is increased. C) There is no tradeoff between the two goods. D) A large amount of unemployment must exist. E) Producing more of one good gives the economy a free lunch.
A contour map illustrates which of the following?
a. the cause-effect relationship between two variables b. the cause-effect relationship between three variables c. the way that three variables are correlated d. the way that one variable affects another, which in turn affects a third variable e. the way that two variables are correlated and in turn cause changes in a third variable
Assume that concerns about tap water potability increase demand for bottled water, and that the new demand (D’ ) is represented by the following: D’ = MSB’ = 7 – 0.1Q What is the new equilibrium quantity (QE’ ) and price (PE’) in the U.S. bottled water market?
Suppose that the U.S. market for bottled water is modeled as follows: S = MSC = 1 + 0.3Q D = MSB = 5 – 0.1Q, whereQ is billions of gallons per year and MSC and MSB are in dollars per gallon.
If the market does not allocate resources perfectly, the government can.
A. True B. False C. Uncertain