Antitrust regulators take into account the likelihood that a firm would fail and exit a market if it is not allowed to merger with another firm.

Question

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Antitrust regulators take into account a range of factors when considering a proposed merger or acquisition, including the potential impact on competition in the relevant market. One factor that may be considered is the likelihood that a firm would fail and exit the market if it is not allowed to merge with another firm. This is known as the "failing firm defense" and may be used by companies to argue that the merger is necessary to prevent the firm from going bankrupt and exiting the market anyway. Antitrust regulators will carefully assess the validity of this defense before making a decision on the proposed merger.

Antitrust Regulators Take into Account the Likelihood That a Firm