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AP® Microeconomics

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Difficult

Oligopoly Merger

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Firm Market Share (%)
A 40
B 30
C 20
D 5
E 5

Refer to the data in the table, which reflects an oligopolistic industry.

If firm $B$, Bob’s Big & Tall merged with firm $C$, Curt’s Clothing, the industry's four-firm concentration ratio would ________________ and its Herfindahl Index would ________________.

A

remain the same; rise

B

remain the same; fall

C

fall; fall

D

fall; rise

E

fall; fall