Version A

I. Multiple choice [2 pt each: 20 pts total]

(1)a. (2)c. (3)e. (4)b. (5)c. (6)a. (7)a. (8)c. (9)c. (10)b.

II. Problems

(1) [Statutes: 15 pts]

1. Sherman Act Section 2;
2. Hart-Scott-Rodino Act;
3. Sherman Act Section 1;
4. Clayton Act;
5. Celler-Kefauver Act.

(2) [HHI and merger guidelines: 24 pts]

1. 950;
2. Unconcentrated;
3. 1050;
4. Moderately concentrated;
5. Unclear;
6. According to the 1992 Horizontal Merger Guidelines, "mergers producing an increase in the HHI of less than 100 points in moderately concentrated markets post-merger are unlikely to have adverse competitive consequences and ordinarily require no further analysis. Mergers producing an increase in the HHI of more than 100 points in moderately concentrated markets post-merter potentially raise significant competitive concerns ..." (section 1.51(b)). The Guidelines don't address an increase in the HHI of exactly 100 points.

(3) [Welfare tradeoffs of mergers: 40 pts]

1. $6;
2. 7 thousand;
3. Intercept of MR curve is $20, slope is -4/thousand;
4. $12;
5. 4 thousand;
6. $33 thousand;
7. $24 thousand;
8. $8 thousand;
9. decrease;
10. $1 thousand.

Version B

I. Multiple choice [2 pt each: 20 pts total]

(1)d. (2)f. (3)b. (4)e. (5)f. (6)b. (7)e. (8)a. (9)e. (10)d.

II. Problems

(1) [Statutes: 15 pts]

1. Sherman Act Section 1;
2. Clayton Act;
3. Celler-Kefauver Act;
4. Sherman Act Section 2;
5. Hart-Scott-Rodino Act.

(2) [HHI and merger guidelines: 24 pts]

1. 1568;
2. Moderately concentrated;
3. 1600;
4. Moderately concentrated;
5. No;
6. According to the 1992 Horizontal Merger Guidelines, "mergers producing an increase in the HHI of less than 100 points in moderately concentrated markets post-merger are unlikely to have adverse competitive consequences and ordinarily require no further analysis" (section 1.51(b)).

(3) [Welfare tradeoffs of mergers: 40 pts]

1. $3;
2. 9 thousand;
3. Intercept of MR curve is $12, slope is -2/thousand;
4. $7;
5. 5 thousand;
6. $28 thousand;
7. $20 thousand;
8. $5 thousand;
9. decrease;
10. $3 thousand.

[end of answer key]