Answer
5%
Work Step by Step
The merger between Pennzoil and Quaker State—two of the top five motor oil brands—reduced competition in the market, giving the combined company greater pricing power. After the merger, the price of Quaker State motor oil increased by roughly 5 percent, which suggests that the firm was able to raise prices without losing significant market share. This outcome aligns with economic theory: when competition diminishes, firms can charge more because consumers have fewer alternatives. The modest price increase also indicates that while the merger had an impact, market forces or remaining competitors may have limited the extent of price hikes.
The price increased 5%.
