The Local Pizza Delivery Industry Currently Has a Herfindahl-Hirschman Index

The local pizza delivery industry currently has a Herfindahl-Hirschman index (HHI) value of 999 and two of the competing pizza shops have considered merging. Because the merger would raise the HHI by 55 points, the Federal Trade Commission would likely

A) not challenge the merger.
B) challenge the merger.
C) allow the merger under the condition that HHI does not rise by more than 55 points as promised.
D) allow the merger under the condition that the HHI remain at the premerger level of 999.

Correct Answer:

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