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An increase in HHI would increase the market concentration, hence US Department of Justice as a thumb rule would consider an HHI by 200 points as a matter of concern and would breach the antitrust laws.
Antitrust laws are laws enacted by governments to protect consumers from predatory business practices and ensure fair competition. Antitrust laws apply to a wide range of questionable business activities, including market sharing, bid rigging, price fixing, and monopolies.
Rockefeller's Standard Oil is his one of the most famous examples of antitrust law. The company has slashed prices by more than 50% from his and has acquired several competitors. As market dominance increased, the company further reduced production costs and prices, resulting in even greater profits.
The Sherman Act, enacted by Congress in 1890, is the basis for most of the antitrust laws in the United States. It forbids all agreements and conspiracies to restrict trade and commerce. These prohibited restrictions include price fixing, market sharing, boycotts, bid rigging and tying arrangements.
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If an industry has a premerger Herfindahl–Hirschman index (hhi) of 2,499, the justice department will challenge the proposed merger if it adds more than 200 points to the hhi.
A group of industries, productive enterprises, or organizations that produce or supply goods, services, or a source of income. In economics, industries are commonly classified as primary, secondary, tertiary, and quaternary. Secondary industry is further divided into heavy industry and light industry. copper mine.
An industry is a group of manufacturers or companies that produce a particular kind of goods or services. Textile workers design, manufacture and sell fabrics. The tourism industry includes all commercial aspects of tourism.
An industry is a group of companies related by their primary business activities. There are dozens of industrial classifications in the modern economy. Industry classifications are usually grouped into larger categories called sectors.
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