If a Firm with a 20 Percent Market Share Merges

question 179

Multiple Choice

If a firm with a 20 percent market share merges with a firm with 5 percent of the market, by how much will the Herfindahl index change? The other firms have 40 percent, 15 percent, 10 percent, and 10 percent shares.

• A)It rises by 100.
• B)It rises by 200.
• C)It falls by 100.
• D)It falls by 200.
• E)It rises by 25.

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Definitions:

Puritans

A religious reform movement in the late 16th and 17th centuries, seeking to "purify" the Church of England of Roman Catholic practices, many of whose adherents later settled in North America.

Church Of England

The primary state church in England, a Christian church characterized by a distinctive Anglican faith and identity, with the monarch serving as its supreme governor.

Massasoit

A leader of the Wampanoag Confederacy who played a key role in the early interaction between Native American tribes and the Pilgrims in the 17th century.

Wampanoag Chief

A leader of the Wampanoag, a Native American tribe from the northeastern United States, known historically for their involvement in early interactions with European settlers, including the first Thanksgiving.