Suppose That Firms a and D in This Table Merged

question 252

Multiple Choice

Suppose that firms A and D in this table merged into a single firm. The four-firm concentration ratio and the Herfindahl index would

• A)remain unchanged and rise, respectively.
• B)rise and remain unchanged, respectively.
• C)both fall.
• D)both rise.

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Definitions:

Generalized Reciprocity

A type of exchange where goods or services are provided without an immediate or specified return, often found within close relationships or communities.

Close Kin

Family members closely related by blood, typically immediate family such as parents, children, and siblings.

Entrepreneurs

Individuals who create, organize, and operate businesses, taking on greater than normal financial risks in order to do so, often seen as innovators who drive economic growth.

Traders

Individuals or entities engaged in the buying and selling of goods, services, or financial instruments, often acting as intermediaries in trade transactions.