In What Situation Are the Department of Justice and Federal

Multiple Choice

In what situation are the Department of Justice and Federal Trade Commission most likely to challenge the merger between two competitors?

A) When the Herfindahl index is close to 0 and the number of firms is large
B) When targeted price discounts can be implemented by rival firms
C) When the merger threatens to substantially increase market concentration
D) When the merger threatens to substantially decrease market concentration
E) In a large industry with many competitors, each having a relatively equal market share