In a 50-Firm Industry, Two of the Smallest Firms Merge

question 157

Multiple Choice

In a 50-firm industry, two of the smallest firms merge. Yet the 4-firm concentration ratio and the 8-firm concentration ratio did not change. All things considered, we can say that the industry has

• A) moved closer to pure competition because the number of firms decreased.
• B) moved farther away from competition because the number of firms decreased.
• C) experienced no change in competition even though the number of firms decreased.
• D) to be identified first; otherwise there is no way to tell.

---

Definitions:

Payees

Individuals or entities to whom money is payable, often seen in the context of checks or promissory notes.

Negotiation

The process of discussing and arriving at a mutual agreement between parties, often involving compromise or conciliation.

Depositary Bank

A financial institution that holds and manages securities for its clients, facilitating the trading of these securities.

Payor Bank

The bank that is directed by a check or draft to pay a certain amount of money to the person or entity named on the check.