Home / Questions / The market shares (in percentage terms) for the 12 firms that comprise an industry are 15,
The market shares (in percentage terms) for the 12 firms that comprise an industry are 15, 12, 11, 10, 8, 7, 7, 6, 6, 6, 6, and 6. The Herfindahl index will rise by __________ points if the firms with the two largest market shares merge.
a.400
b.360
c.100
d.220
e.140
114.If company A and B combine under single ownership of control, this would be a __________ merger.
a.horizontal
b.vertical
c.conglomerate
d.Herfindahl
e.There is not enough information to answer the question.
115.If two firms in the same industry (but at different stages of the production process) merged, this would be a(n) __________ merger.
a.vertical
b.conglomerate
c.horizontal
d.antitrust
e.none of the above
116.The type of merger that is most likely to change the degree of concentration, or competition, in an industry is the __________ merger.
a.four-firm
b.vertical
c.four-firm
d.horizontal
e.none of the above
117.In Industry A, the largest four firms together have a 30 percent share of the market and there are a total of eight firms in the market. In Industry B, the largest four firms together have a 30 percent share of the market and there are 100 other firms in the market. If we want to distinguish between the concentration in these two industries, the best measure to use is the
a.four-firm concentration ratio.
b.horizontal-merger index.
c.vertical-merger index.
d.Herfindahl index.
e.none of the above
118."Exclusive dealing" refers to
a.charging one customer a higher price than another customer for the same good.
b.the condition that is necessary before a conglomerate merger is likely to be successful.
c.a provision of the Sherman Act.
d.selling to a retailer on the condition that the retailer not carry any rival products.
e.none of the above
119.The act that made exclusive dealing illegal was the
a.Sherman Act.
b.Federal Trade Commission Act.
c.Robinson-Patman Act.
d.Clayton Act.
e.none of the above
120.For a natural monopoly firm, the resource-allocative efficient output is 200 units. The highest per-unit price that can be charged for this output is $3. Average total cost at 200 units is $3.50. For the natural monopoly firm that produces and sells 200 units of output,
a.marginal cost is below its average total cost.
b.it takes losses of $0.50 per unit.
c.fixed costs must be zero.
d.a and b
e.b and c
121.A local government prevents any firm from competing with a natural monopoly firm. Those people who believe this is a wise policy action would likely say
a.this is a desirable state of affairs since if competition is allowed, the natural monopoly firm will out compete all newcomers and in the end the newcomers will go out of business.
b.the public doesn't want more than one company to produce certain goods that it buys.
c.the first company that provides a certain good to the public should have the right to produce that good without competition from others.
d.if competition is allowed, no firm in the industry will be able to earn profits.
e.none of the above
122.The type of regulatory pricing (of a natural monopoly firm) that is consistent with resource-allocative efficiency is __________ cost pricing.
a.average
b.sunk
c.marginal
d.fixed
e.none of the above
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