Using the market shares in the table above, if Big W wants to buy ...

[fahad]

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.

Question 2

The single-price monopolist shown in the above figure could increase its economic profit if
 
  A) it became a price discriminator.
  B) its costs of production decreased.
  C) the demand for its good increased.
  D) any or all the above were to occur.

[spencer.martell]

Answer to Question 1

D

Answer to Question 2

D