Suppose an Industry Consists of Five Equal-Sized Firms

question 68

Multiple Choice

Suppose an industry consists of five equal-sized firms. Two of the firms plan to merge. The merger ______________ raise anti-trust concerns at the Justice Department given that the Herfindahl index before the merger was _____________ and the merger would cause the Herfindahl index to rise by __________.

• A)would; between 1,000 and 1,800; more than 100
• B)would; greater than 1,800; more than 100
• C)would not; less than 1,000; less than 300
• D)would not; between 1,000 and 1,800; less than 100

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Definitions:

Entrepreneurs

Individuals who initiate, manage, and take on the risks of a business or enterprise with the goal of making a profit.

Crowdfunders

Individuals or entities that contribute financial resources to projects or ventures through crowdfunding platforms.

Bootstrapping Strategy

A self-funding approach where a startup or project is funded by the founders' personal finances or generated revenue rather than external investors.

Sweat Equity

The non-monetary contribution, such as time, effort, and labor, that founders or employees provide to increase the value of a startup or business.