Asked by
Holly Sweeney
on Nov 26, 2024Verified
Mergers of firms in an industry tend to
A) transform monopolistic competition into pure competition.
B) transform monopolistic competition into oligopoly.
C) reduce the Herfindahl index for the industry.
D) break up an oligopoly.
Mergers
The combination of two or more companies into a single entity, often with the goal of increasing market share, reducing costs, or enhancing competitiveness.
Monopolistic Competition
A market structure characterized by many firms selling products that are similar but not identical, allowing for significant degrees of market power and product differentiation.
Oligopoly
A market structure characterized by a small number of firms which dominate the market, leading to limited competition and often high prices.
- Examine the influence of mergers and acquisitions on market concentration and the Herfindahl index.
Verified Answer
PG
Learning Objectives
- Examine the influence of mergers and acquisitions on market concentration and the Herfindahl index.