The 2010 Horizontal Merger Guidelines

question 6

Multiple Choice

The 2010 Horizontal Merger Guidelines:

• A) were issued by the Justice Department to be additional to the FTC's separate guidelines.
• B) require a mechanical application; in order to reduce the previously used analytic framework, which was far too subjective and uncertain.
• C) rejects use of the Herfindahl-Hirschman Index.
• D) clarify that merger analysis does not use a single methodology.

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Definitions:

Long-Run Cost Function

A graphical or mathematical representation that shows the lowest cost at which a firm can produce any given level of output in the long run, when all inputs are variable.

Positive Output

A situation where the production of goods or services is above zero.

Production Function

An equation or system that illustrates the connection between production inputs and the resulting products or services.

Long-Run Total Cost

Refers to the total cost incurred by a firm in producing a given output when all inputs, including both fixed and variable costs, are considered over a longer period.