is quite possible that a merger between, say, the fifth and sixth largest firms in the market could create a

new firm that is then ranked in the top four in the market. In this case, a merger of two firms, neither in the

top four, would still change the four-firm concentration ratio.

2. No, it is not true. The HHI includes the market shares of all firms in its calculation, but the squaring of the

market shares has the effect of making the impact of the largest firms relatively bigger than in the 4-firm

or 8-firm ratio.

3. The bus companies wanted the broader market definition (i.e., the second definition). If the narrow

definition had been used, the combined bus companies would have had a near-monopoly on the market

for intercity bus service. But they had only a sliver of the market for intercity transportation when

everything else was included. The merger was allowed.

4. The common expectation is that the definition of markets will become broader because of greater
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