The Federal Trade Commission Is Likely to Challenge a Merger

question 106

Multiple Choice

The Federal Trade Commission is likely to challenge a merger in an industry with

• A)a low price-cost margin because it reflects firm inefficiency.
• B)a high price-cost margin because it reflects firm inefficiency.
• C)a low price-cost margin because it reflects high market power.
• D)a high price-cost margin because it reflects high market power.
• E)a negative price-cost margin because it reflects poor industry performance.

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Definitions:

Optical Instrument

An optical instrument is a device designed to manipulate light in order to view or analyze objects with enhanced detail.

Refraction

The bending of light by the cornea, lens, and eye fluids to focus light onto the retina.

Specific Gravity

A measure of the density of a substance compared to the density of water.

Centrifuge

A machine that uses centrifugal force to separate substances of different densities, such as blood components.