Suppose a Monopolistically Competitive Industry Has Five Firms; the Two

Multiple Choice

Suppose a monopolistically competitive industry has five firms; the two largest each have a 30 percent share of the market and the remaining three firms each have a 20 percent share of the market.If the two largest firms merge,the Herfindahl-Hirschman Index increases by ________ points to ________.

A) 0; 100
B) 0; 3,000
C) 1,800; 4,800
D) none of the above