Calculation of Change in the HHI Associated with a Merger

question 60

Multiple Choice

Calculation of Change in the HHI Associated with a Merger The Justice Department has been asked to review a merger request for a market with the following four firms.
If Firm A acquires Firm D,what is the HHI for the new market?

• A)100
• B)625
• C)3,906.25
• D)4,687.50

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Definitions:

Area

In statistics, often refers to the region under the curve of a probability distribution representing the probability of a range of outcomes.

Variance

An indication of how data points diverge from their average, showing the extent of their spread.

Normally Distributed

Describes a distribution that follows a bell curve, where data is symmetrically distributed with most values clustering around a central point.

Normally Distributed

Describes a statistical distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence.