The Mini-Case \"Are Monopoly Mergers Harmful\" states that there are about 5,000

Question

The Mini-Case "Are Monopoly Mergers Harmful" states that there are about 5,000 ready-mix concrete plants in the United States. With so many plants in operation why is there concern about mergers creating monopoly power? There is a concern about mergers creating monopoly power in the industry for ready-mix concrete because O A. technology is increasing the ability to transport concrete. O B. the concrete industry is large. C. few of these concrete firms directly compete. D. concrete transportation costs are low. E. the country's concrete market is a national one Also, explain why speed of entry is important in assessing the cost of mergers that create a monopoly. Considering the speed of entry is important in assessing the cost of mergers that create a monopoly in the concrete industry because A, O B. OC. O D. O E. the production of concrete requires no fixed imputs new concrete firms must incur substantial sunk entry costs. technology quickly changes the concrete production process. merged concrete monopolies quickly go out of business. existing concrete firms only earn large profits temporarily.

Explanation / Answer

Answer-a

There is a concern about merger creating monopoly in industry of concreate because this industry is large. Monopoly in large industry can decrease the social welfare in huge percentage.

So, B is right answer.

Answer-b

Speed of entry of is important for merger that create monopoly because technology is changing in concrete industry, which change the cost of production. If merger merge with a firm who is using little bit old technology that merge will make loss to merger.

So, C is right answer

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