Merger of beer giants faces obstacles Mega-brand beers have lost market share to wine and craft beer. In response, Anheuser-Busch InBev and SABMiller, the two biggest brewers in the world, are discussing a merger that would be scrutinized by antitrust regulators. Source: The New York Times, September 16, 2015 How would a merger benefit the two big brewers? Under what circumstances would the Federal Trade Commission (FTC) challenge the merger? A merger would benefit the two big brewers because O A. the price of beer would fall close to the price in a perfectly competitive market and sales would increase O B. average total cost would increase but price would increase by more than average total cost OC. the price of beer could rise close to the monopoly price and economic profit would increase O D. many craft brewers would be forced out of the market The Federal Trade Commission would challenge the merger if O A. it increases the HHI O B. the HHI is less than 1,500 OC. the HHI is between 1,500 and 2,500 and the merger increases the HHI by 50 points O D. the HHI exceeds 2,500 and the merger increases the HHI by 100 points
Merger of beer giants faces obstacles Mega-brand beers have lost market share to wine and craft beer. In response, Anheuser-Busch InBev and SABMiller, the two biggest brewers in the world, are discussing a merger that would be scrutinized by antitrust regulators. Source: The New York Times, September 16, 2015 How would a merger benefit the two big brewers? Under what circumstances would the Federal Trade Commission (FTC) challenge the merger? A merger would benefit the two big brewers because O A. the price of beer would fall close to the price in a perfectly competitive market and sales would increase O B. average total cost would increase but price would increase by more than average total cost OC. the price of beer could rise close to the monopoly price and economic profit would increase O D. many craft brewers would be forced out of the market The Federal Trade Commission would challenge the merger if O A. it increases the HHI O B. the HHI is less than 1,500 OC. the HHI is between 1,500 and 2,500 and the merger increases the HHI by 50 points O D. the HHI exceeds 2,500 and the merger increases the HHI by 100 points
Chapter1: Making Economics Decisions
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Transcribed Image Text:Merger of beer giants faces obstacles
Mega-brand beers have lost market share to wine and craft beer. In response, Anheuser-Busch InBev and SABMiller, the two biggest brewers in the world, are discussing a merger that would be scrutinized by antitrust regulators.
Source: The New York Times, September 16, 2015
How would a merger benefit the two big brewers? Under what circumstances would the Federal Trade Commission (FTC) challenge the merger?
A merger would benefit the two big brewers because
O A. the price of beer would fall close to the price in a perfectly competitive market and sales would increase
O B. average total cost would increase but price would increase by more than average total cost
O C. the price of beer could rise close to the monopoly price and economic profit would increase
O D. many craft brewers would be forced out of the market
The Federal Trade Commission would challenge the merger if
O A. it increases the HHI
O B. the HHI is less than 1,500
O C. the HHI is between 1,500 and 2,500 and the merger increases the HHI by 50 points
O D. the HHI exceeds 2,500 and the merger increases the HHI by 100 points
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