An oligopoly market has two sellers Firm A and Firm B only. Both firms have a marginal cost of Rs2.Firm A has a demand elasticity of − 8 and Firm B has a demand elasticity of − 1.5. A. Calculate the profit maximising price and Lerner Index for each firm. Explain the difference in degree of monopoly power between the two firms. B. If the two firms A and B have 80% and 20% market share respectively, calculate the Herfindahl's index. What would be the highest value of this index? C. Barriers to entry are more significant under monopoly than under Oligopoly. Identify at least three barriers to entry.

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