If a firm with a 20 percent market share merges with a firm with ...

[penza]

If a firm with a 20 percent market share merges with a firm with 5 percent of the market, by how much will the Herfindahl index change? The other firms have 40 percent, 15 percent, 10 percent, and 10 percent shares.
 a. It rises by 100.
  b. It rises by 200.
  c. It falls by 100.
  d. It falls by 200.
  e. It rises by 25.

Question 2

A market is said to be allocatively efficient when the marginal cost of producing each good equals the marginal benefit that consumers derive from that good
 a. True
  b. False

[Gabe]

Answer to Question 1

B

Answer to Question 2

A