Many MBAs who ventured into the “.com” world of the late 1990s found themselves unemployed by 2001 as many firms in that industry ceased to exist. However, during their tenure with these companies, these managers gained valuable skills in how to operate within a highly competitive environment. Based on the numbers in the Table below, which industries represent the best match for these managers’ expertise? Looking at theindustries listed in Table, what factors give rise to the varying levels of market power? Table 7-3Market and Representative Firm Demand Elasticities and Corresponding RothschildIndexes for Selected U.S. IndustriesOwn Price Elasticityof Demand forRepresentativeFirm's ProductOwn Price Elasticityof Market DemandIndustryRothschild IndexFood-1.0-3.80.26Tobacco-1.3-1.31.00Textiles-1.5-4.70.32Аpparel-1.1-4.10.27Paper-1.5-1.70.88Printing and publishing-1.8-3.20.56Chemicals-1.5-1.51.00Petroleum-1.5-1.70.88Rubber-1.8-2.30.78Leather-1.2-2.30.52SouRcE: Matthew D. Shapiro, "Measuring Market Power in US. Industry." National Bureau of Economic Research, Working Paper No. 2212, 1987.

After, all the manager earns valuable skills in how well the firm operates with a combative…

Answered: Own Price Elasticity of Demand for Own…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Many MBAs who ventured into the “.com” world of the late 1990s found themselves unemployed by 2001 as many firms in that industry ceased to exist. However, during their tenure with these companies, these managers gained valuable skills in how to operate within a highly competitive environment. Based on the numbers in the Table below, which industries represent the best match for these managers’ expertise? Looking at the
industries listed in Table, what factors give rise to the varying levels of market power?

Table 7-3
Market and Representative Firm Demand Elasticities and Corresponding Rothschild
Indexes for Selected U.S. Industries
Own Price Elasticity
of Demand for
Representative
Firm's Product
Own Price Elasticity
of Market Demand
Industry
Rothschild Index
Food
-1.0
-3.8
0.26
Tobacco
-1.3
-1.3
1.00
Textiles
-1.5
-4.7
0.32
Аpparel
-1.1
-4.1
0.27
Paper
-1.5
-1.7
0.88
Printing and publishing
-1.8
-3.2
0.56
Chemicals
-1.5
-1.5
1.00
Petroleum
-1.5
-1.7
0.88
Rubber
-1.8
-2.3
0.78
Leather
-1.2
-2.3
0.52
SouRcE: Matthew D. Shapiro, "Measuring Market Power in US. Industry." National Bureau of Economic Research, Working Paper No. 2212, 1987.

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