All Beverages
All Soft Drinks
Cola
What is the SSNIP Test?
The SSNIP test asks: if a hypothetical monopolist of a candidate market imposed a small (typically 5-10%) but significant and non-transitory price increase, would it be profitable?
If YES: The candidate market is a relevant antitrust market.
If NO: Expand the market definition to include substitutes until a SSNIP would be profitable.
Price Increase
Consumer Response
Switch to Pepsi (within market)
15%
Switch to other soft drinks
8%
Switch to water/juice/other
3%
-1.20
Own-Price Elasticity of Demand
SSNIP Profitable
A 5% price increase by a hypothetical cola monopolist would be profitable. "Cola" is the relevant market.
Relevant Market: Cola
Antitrust Implications
Market definition is often the most critical step in merger analysis. A narrower market definition means higher market shares and concentration, making an anticompetitive finding more likely.
The DOJ/FTC Horizontal Merger Guidelines use the SSNIP test (typically 5%) to define relevant markets before calculating HHI and assessing competitive effects.