Question

1.) According to the FTC's historical guidelines for mergers, would the FTC approve a merger between two firms that would result in an HHI of 1,025 after the merger?

A.Yes, the FTC would ignore the merger and allow it to go through.

B. Maybe. The FTC would scrutinize the merger and make a case-by-case decision.

C. No, the FTC would probably challenge the merger.

2.) It can be difficult to understand the nature of competition between firms in a market which is driven by change factors like technology, and capital driven mergers. Because of this the Federal Trade Commission has begun to look less at market share and more at the data on actual ______________________________.

A. competition between businesses

B. selective anti-competitive industry practices

C. Herfindahl Herschman Index numbers

D. Market definition

3.) The nature of markets has changed radically in recent decades. There are two critical factors responsible for this change. What are they?

SELECT ALL THAT APPLY!!!

A. Globalization and Technology

B. Technology and Capital

C. Analytical Tools and Algorithms

D. Competition and Free Trade

4.) Mergers and aquisitions result in the consolidation of assets and liabilities of two companies under one entity. However, a merger and an aquisition are two different types of market activity. Which of the following best describes a merger?

A. when an entity takes ownership of another entity's stock, equity interests, and assets

B. the consolidation of assets and liabilities under two entities

C. a legal consolidation of two entities into one entity

D. all of the above

5.) True or false?

If there is a market with the below noted market segmentation, you would multiply the highest four segmentation values to find the four firm market segmentation ration?

Distribution of sales:

• 30%
• 3%
• 10%
• 5%
• 15%
• 2%
• 35%

A. True

B. False

6.)  When one firm purchases another, it is called ________________.

A. A merger

B. An Acquisition

C. An International Subsidiary

D. None of the above

Answer 1

1.

B.

The merger shows the moderate level of concentration in the market. In this scenario, the FTC will assess the merger on a case to case basis.

-----------------

2.

A

The actual competition between the firms, will show the real assessment of the impact of mergers upon the market concentration and competition after the merger.

------------------

3.

A

It is the globalization that making the movement of firms from one market to another and affecting the nature and shape of the market. Further, it is the technology that is becoming disruptive and or incremental to change the shape of the market as well as consumers' demand in the market.

----------------

4.

C

Merger creates one entity that has consolidated assets and liabilities of the entities that are merged. It is also legal.

---------------

5.

B. False

It is not multiplied, rather added to identify the four firm concentration ratio.

--------------

6.

B

It is a case of acquisition of one firm by the another firm.