Question

According to the U.S. Department of Justice Merger Guidelines, a Herfindahl-Hirschman index (HHI) above __________ is associated with a highly concentrated industry. Therefore, if the automobile industry had an HHI of 2,200, then a vertical merger between GM and one of its suppliers likely would be __________ . Multiple Choice 1,300; rejected since the HHI is above the acceptable threshold 2,400; approved since the HHI is below the acceptable threshold 1,800; rejected since the HHI is above the acceptable threshold 2,500; approved since the HHI is below the acceptable threshold

Answer 1

Answer: According to the U.S. Department of Justice Merger Guidelines, an Herfindahl-Hirschman Index (HHI) above 2,500 is associated with a highly concentrated industry. If the automobile industry had an HHI of 2,200, then a vertical merger between GM and one of its suppliers would likely be **approved** since the HHI is below the acceptable threshold.

So, the correct choice is: 2,500; approved since the HHI is below the acceptable threshold.

Step-by-step explanation: