Suppose there are two industries, A and B. Suppose that mergers are proposed in both industries, and the Herfindahl-Hirschman Index would increase by 500 in each one. If antitrust officials allow the mergers in industry A but challenge the mergers in industry B, the most likely explanation is that
a. there are political motivations to antitrust enforcement
b. industry A was already less competitive than industry B
c. industry A had a balanced oligopoly and industry B did not
d. industry A started as a more competitive industry than B
e. antitrust authorities made a random decision
D
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An internal economies of scale is defined as
A) one whose size or scale effects are not located in the firm, but in the industry. B) one with falling costs over a specific level of output. C) one with falling costs over a relatively large range of output. D) one with falling costs over a relatively large range of output, but definite declining profits.
An increasing-cost industry will have
A) a perfectly elastic long-run supply curve. B) a perfectly inelastic long-run supply curve. C) an upward sloping supply curve in the long run. D) an upward sloping demand curve in the long run.