Questions: According to the U.S. Department of Justice Merger Guidelines, a Herfindahl-Hirschman index (HHI) above is associated with a highly concentrated industry. Therefore, if the automobile industry had an HHI of 2,200, then a vertical merger between GM and one of its suppliers likely would be 1,300; rejected since the HHI is above the acceptable threshold 2,400; approved since the HHI is below the acceptable threshold 1,800; rejected since the HHI is above the acceptable threshold 2,500; approved since the HHI is below the acceptable threshold

The answer is the third one (1,800; rejected since the HHI is above the acceptable threshold).

Explanation for each option:

1. 1,300; rejected since the HHI is above the acceptable threshold: This option is incorrect because an HHI of 1,300 is not considered highly concentrated according to the U.S. Department of Justice Merger Guidelines. Industries with an HHI below 1,500 are typically considered unconcentrated.

2. 2,400; approved since the HHI is below the acceptable threshold: This option is incorrect because an HHI of 2,400 is above the threshold for a highly concentrated industry. The threshold for a highly concentrated industry is 2,500, but an HHI of 2,400 is still considered concentrated and would likely warrant scrutiny.

3. 1,800; rejected since the HHI is above the acceptable threshold: This option is correct. An HHI above 1,800 indicates a concentrated industry, and a merger in such an industry would likely be rejected or scrutinized closely to prevent reduced competition.

4. 2,500; approved since the HHI is below the acceptable threshold: This option is incorrect because an HHI of 2,500 is exactly at the threshold for a highly concentrated industry. A merger in such an industry would likely be rejected or scrutinized to ensure it does not harm competition.

In summary, the correct answer is that an HHI of 1,800 is associated with a concentrated industry, and a merger in such an industry would likely be rejected due to the potential for reduced competition.