An Industry Has a Single Firm and Is Found to Have

question 157

Multiple Choice

An industry has a single firm and is found to have violated antitrust laws. The government breaks it up into two firms that will share the market equally. The Herfindahl index for this industry would change from

• A) 100 to 50.
• B) 10,000 to 2,500.
• C) 100,000 to 50,000.
• D) 10,000 to 5,000.

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Definitions:

Cost Driver

A factor that causes the cost of an activity or process to change.

Time Frame

The period during which an event occurs or is planned to occur, often with a specified start and end date.

Cost Data

Information related to the amounts incurred to create a product or service, used for budgeting, valuing inventory, and setting selling prices.

Cost Estimation Methods

Techniques used to predict the costs associated with the production of a product, project, or operation.