Microeconomics › Section K · Monopoly and antitrust policy › Topic K.1
Corporate mergers and market concentration
When two firms become one, the arithmetic of the market changes: costs may fall through scale, but rivals are one fewer and coordination gets easier. Deciding which effect wins - and when a government should say no - is the antitrust problem, and it begins with measuring concentration.
In this topic
- Why firms merge
- The regulator's dilemma
- Where the law came from
- Merger review in practice
- Measuring concentration: the four-firm ratio and its blind spot
- The HHI sees the giant
- Worked example: a merger's arithmetic
- Market definition: the decisive question
- Worked example: reviewing two mergers
- Common mistakes to avoid
- Key takeaways
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