The Hirschman-Herfindahl index (HHI) in an industry is 50. A merger is proposed that will raise the HHI to 100. In this case, the
A) Sherman Act will prohibit the merger.
B) Federal Trade Commission will challenge the merger.
C) Federal Trade Commission will not challenge the merger.
D) rule of reason will prevent the merger if it represents a horizontal merger.
C
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Refer to Figure 4-1. If the market price is $3.00, what is the maximum number of burritos that Arnold will buy?
A) 0 B) 2 C) 3 D) 4
If Japan is twice as good at producing cameras and three times as good at producing TV sets as the United States, Japan is said to have a comparative advantage in TV sets and the United States has a comparative advantage in cameras.
Answer the following statement true (T) or false (F)
In a very basic principal-agent model, output is contractible if:
A. the employee works independently and cannot game the performance measure. B. the employee works in a team C. it can be observed with some positive cost. D. the employee produces many products.
Competitive pressure in the insurance market will, in general,
A. make insurance premiums attractive to low risk drivers. B. induce risky drivers to self-insure. C. induce the least risky drivers to self-insure. D. make insurance premiums unattractive to drivers who are much riskier than average.