When is the Department of Justice less likely to allow a merger?
What will be an ideal response?
The Department of Justice (DOJ) reviews merger cases and decides whether the main objective is to increase market power or whether there are important efficiency gains from such a merger. One of the main approaches the DOJ adopts in its analysis of mergers is to calculate how concentrated an industry is. An industry is deemed concentrated when a few firms account for a large fraction of total sales in that industry. When a merger stands to increase concentration significantly, the DOJ is less likely to allow the merger.
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In the figure above, compared to a perfectly competitive industry with the same costs, a single-price, unregulated monopoly will raise the price by
A) $2.00 per unit. B) $4.00 per unit. C) $6.00 per unit. D) $8.00 per unit.
"Recession" refers to a period when real GDP in the economy:
A. declines for at least six months. B. suffers due to political instability. C. grows rapidly. D. experiences a rise in living standards.