EconomicsAn industry consists of three firms with sales of $25, $45, and $55.a. Calculate the Herfindahl-Hirschman index (HHI).Instruction: Enter your response rounded to the nearest integer.b. Calculate the four-firm concentration ratio (C4).c. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, is the Department of Justice likely to attempt to block a horizontal merger between two firms with sales of $25 and $45?

a. Herfindahl-Hirschman index (HHI) is the square of the market sales of the…

Answered: An industry consists of three firms…

An industry consists of three firms with sales of $25, $45, and $55. a. Calculate the Herfindahl-Hirschman index (HHI). Instruction: Enter your response rounded to the nearest integer.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter15: Oligopoly And Strategic Behavior

Section: Chapter Questions

Problem 7P

See similar textbooks

Related questions

Q: PRICE (Dollars per can) 2.00 1.80 1.60 Demand 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0 0 MC = ATC MR 90…

A: Step 1:When acting as a profit-maximizing cartel, each company will produce 180 cans and charge…

Q: The following table lists the market shares of the eight firms in an industry. Market Shares of…

A: Concentration ratio is measure to determine how concentrated the market is. It considers the firms…

Q: part D E

A: Hi! Thank you for the question, as per the honor code, we are allowed to answer three sub-parts at a…

Q: 1. Consider a market with three firms (i = 1, 2, 3), which have identical marginal costs C₁ = C₂ =…

A: Cournot equilibrium is a concept in the field of economics and game theory that describes a…

Q: The market demand in a homogeneous-product Cournot duopoly is P = 100 - 2Q, where Q = Q1 + Q2 (Firm…

A: Market demand: The demand for a product and who wants to buy it is referred to as the market demand.…

Q: 3. In a model of quantity competition, duopolists compete for a market where demand is given by P =…

A: In Stackelberg duopoly, two firms compete in quantity where one firm is a leader and the other is a…

Q: Consider a town in which only two residents, Sean and Yvette, own wells that produce water safe for…

A: A cartel occurs in the oligopoly market to gain the benefit of the monopoly. It is defined as the…

Question

Economics

An industry consists of three firms with sales of $25, $45, and $55.

a. Calculate the Herfindahl-Hirschman index (HHI).

Instruction: Enter your response rounded to the nearest integer.

b. Calculate the four-firm concentration ratio (C₄).

c. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, is the Department of Justice likely to attempt to block a horizontal merger between two firms with sales of $25 and $45?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

An industry consists of three firms with sales of $205.000, $745.000, and $305,000. a. Calculate the Herfindahl-Hirschman Index (HH). Instruction Enter your response rounded to the nearest integer 16.66 Calculate the four-firm concentration ratio (Ca Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, is the Department of Justice likely to attempt to block a horizontal merger between two firms with sales of $205,000 and $305,000? Yes O No
Assume firms' marginal and average costs are constant and equal to c and that inverse market demand is given by P = a - bQ where a, b > 0. Suppose now the market is served by 2 firms (one leader, and one follower) that choose quantities for their identical products. Calculate: i. ii. iii. iv. The Nash equilibrium quantities for the Stackelberg duopolists Market output Market price Firm profit
Suppose that the top six firms in an industry have total annual sales of $250 billion, $210 billion, $150 billion, $120 billion, $80 billion, and $60 billion, respectively. Instructions: Round your answers to the nearest whole number. a. What is the four-firm concentration ratio for this industry? percent b. What is the Herfindahl index for this industry? (Hint: To find the Herfindahl index, you will need to compute the percentage market share for each firm in the industry. When calculating market share, do not round your intermediate calculations.)
An industry consists of three firms with sales of $200,000, $500,000, and $400,000. a. Calculate the Herfindahl-Hirschman index (HHI). Instruction: Enter your response rounded to the nearest integer. b. Calculate the four-firm concentration ratio (C4). c. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, is the Department of Justice likely to attempt to block a horizontal merger between two firms with sales of $200,000 and $400,000? O Yes O No Note:- Please refrain from offering handwritten solutions. Please ensure that your response maintains accuracy and quality to avoid receiving a downvote. Take care of plagiarism. Answer completely. You will get up vote for sure.
An industry consists of three firms with sales of $345,000, $750,000, and $215,000. a. Calculate the Herfindahl-Hirschman index (HHI). Instruction: Enter your response rounded to the nearest integer. b. Calculate the four-firm concentration ratio (C4). c. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, is the Department of Justice likely to attempt to block a horizontal merger between two firms with sales of $345,000 and $215,000? No Yes
If there are two firms Atlas and Bowden in this market with the total cost function TC = 500 + 10Q^2 and they engage in Cournot competition, what is each firm's equilibrium quantity, price, and profit? [NB: round quantities to nearest integer to find equilibrium quantity, price, and profit]
An industry consists of three firms with sales of $285,000,$615,000 , and $310,000 . a. Calculate the Herfindahl-Hirschman index (HHI) . Instruction: Round to the nearest integer. b. Calculate the four-firm concentration ratio (C 4 ) . c. Based on the FTC and DOJ Horizontal Merger Guidellnes described in the text, is the Departmen of Justice likely to attempt to block a horizontal merger between two firms with sales of $285.000 and $310.000 ?
In the mobile phone market, Samsung and Apple constitute a duopoly in the production of devices.The American firm has the following demand q_a = 10 - p_a + 0.25p_s, and the Korean firm, q_s = 20 -p_s+ 0.5p_a. Because both firms assembly their devices in China, their cost structure is the same andequal to ?(q) = 10q, answer the following questions.a) What would be the equilibrium (quantity, price, and profit) in this market, and interpret youranswer.b) If they decide to form a cartel, what are the new quantities, prices, and profits?
1. Assume the market demand for carbonated water be given by QD = 200 − 5P. Assuming there are two firms (A and B) producing carbonated water, each with a constant marginal cost of $ 2. a. What is the market equilibrium price and quantity when each firm behaves as a Cournot duopolist choosing quantities? What profit does each firm earn? b. What is the market equilibrium price and quantity when each firm behaves as a Bertrand duopolist choosing price? What firm profit does each firm earn now?
oligopoli 5.1 The following table represents the market share percent- age for each firm in a hypothetical industry. Firm Market Share A 15 C D E 20 B 6 12 7 H 19 11 F G 10 a. Calculate the four-firm concentration ratio for this industry. b. Calculate the Herfindahl-Hirschman Index (HHI) for this industry. c. Would the Justice Department consider this industry as unconcentrated, moderately concentrated, or concen- trated? Why?
Suppose that the top six firms in an industry have total annual sales of $150 billion, $100 billion, $90 billion, $60 billion, $50 billion, and $10 billion, respectively. Instructions: Round your final answers to the nearest whole number. a. What is the four-firm concentration ratio for this industry? percent b. What is the Herfindahl index for this industry? ces c. Suppose another industry has a Herfindahl index of 1,500. Are firms in the second industry likely to have more or less market power? (Click to select)
please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly