Suppose There Are 6 Firms in an Industry with the Following

question 205

Multiple Choice

Suppose there are 6 firms in an industry with the following market shares.If the two smallest firms want to merge,how will the Federal Trade Commission reply?
Firm 1:30
Firm 2:25
Firm 3:25
Firm 4:10
Firm 5: 7
Firm 6: 3

• A) The firms will be allowed to merge and compete with the larger firms.
• B) The firms will be challenged because the merger will raise the HHI by more than 50 points.
• C) The firms will not be allowed to merge.
• D) The firms will be challenged because the merger will raise the HHI by more than 100 points.
• E) The firms will be challenged because the merger will raise the HHI by more than 250 points.

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