Market Share in the Widget Industry

Multiple Choice

Market share in the Widget industry

-Using the market shares in the table above, if Big W wants to buy Widgette, the Federal Trade Commission will probably

A) approve the merger because the industry is moderately concentrated and the increase in the Herfindahl-Hirschman index (HHI) is small enough.
B) block the merger because the industry is moderately concentrated (HHI between 1,500 and 2,500) and the increase in the HHI is too much.
C) approve the merger because the industry is highly concentrated (HHI exceeds 2,500) but the increase in the HHI is small enough.
D) block the merger because the industry is highly concentrated (HHI exceeds 2,500) and the increase in the HHI is too much.