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Consider a market characterized by a Herfindahl-Hirschman index of 5,000. One of the firms in this market has a Lerner index of 0.89 and is considering a horizontal merger with a competing firm. Based
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Consider a market characterized by a Herfindahl-Hirschman index of 5,000. One of the firms in this market has a Lerner index of 0.89 and is considering a horizontal merger with a competing firm. Based on this information, it is likely that the U.S. Department of Justice will:

User Billy Ferguson
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Answer:

reject the merger

Step-by-step explanation:

Seeing since the market is highly concentrated and the firm's lerner index is also very high, meaning they have a large measure of market power in that industry then it is safe to assume that the U.S. Department of Justice will most likely reject the merger due to this high concentration and the significant power that the proposing firm already has in the market.

User Gnanavel
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