According to the Department of Justice Merger Guidelines, a Proposed

question 14

Multiple Choice

According to the Department of Justice merger guidelines, a proposed merger between two firms may be challenged if the post-merger Herfindahl-Hirschman Index

• A)lies between 1,000 and 1,800 and the merger raises the Index by 50 points.
• B)lies between 1,000 and 1,800 and the merger raises the Index by more than 100 points.
• C)lies above 1,800 and the merger raises the Index by less than 50 points.
• D)lies below 1,000 and the merger raises the Index by 100 points.

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Definitions:

Diminishing Returns

A principle stating that if one input in the production of a commodity is increased while other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.

Imperfectly Competitive

A market structure characterized by many producers that have some control over the prices they charge, but where no single firm dominates the market.

Wage Rate

The amount of compensation individuals receive in exchange for their labor per unit of time, often expressed as an hourly wage.

Maximize Profits

The process or strategy of adjusting production or operations to achieve the highest possible financial return or profit.