Why would the FTC and the Justice Department be concerned about the merger of two strong companies in a market with few competitors? What advantages could the newly-formed company have?

Answer:

The FTC and Justice Department may worry that the merger would reduce competition in a market that already has few competitors. The new company could have a larger market share and greater market power, which might let it raise prices, restrict output, or make it harder for other businesses to compete. It may also gain efficiencies from combining resources.