Please use the hypothetical information in the table, which concerns the acoustic guitar market, to answer the questions.Market share (%Firm nameTaylor34Dean32Ibanez14Gibson20Calculate the Herfindahl-Hirschman Index (HHI) for this market= IHHIf Taylor and Ibanez decided to merge, what action would the Federal Trade Commission (FTC) most likely take?O The FTC would challenge the merger because it raises the index by more than 50 points.O The FTC would likely not challenge the merger.O The FTC would challenge the merger automacally because the original index is so highO The FTC would issuewarning that the market is becoming too concentrated

Herfindahl-Hirschman Index:"HHI" represents the Herfindahl-Hirschman Index, a normally acknowledged…

Answered: Please use the hypothetical information…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Answer the following questions based on the information given in the article below. MXCC to Probe Grab-Uber Merger By Sulhi Azman, The Edge Markets, July 13,2018 KUALA LUMPUR (July 13): The Malaysia Competition Commission (MyCC) will investigate the merger between Uber and Grab in Malaysia, which has resulted in Grab having a monopoly in the country's ride-hailing business. "MyCC has taken preliminary action and conducted its first discussion with Uber and Grab on March 30, 2018, which was four days after the two companies announced their merger position," the Domestic Trade and Consumerism Ministry said in a statement today. Under the Competition Act 2010, the ministry said MyCC is empowered to take on parties which have merged and thus having resulted in a monopoly status within the market it operates at. At the same time, the ministry said MyCC is empowered to investigate and take action on parties abusing the monopoly status and violating Section 2 of the Competition Act 2010,…
Two firms are engaged in Cournot (simultaneous quantity) competition. Market-level inverse demand is given by P = 160 − 4Q Firm 1 has constant marginal costs of MC1 = 8, while Firm 2 has constant marginal costs of MC2 = 24. 1) Does there exist a low enough positive marginal cost for firm 1 such that firm 1 acts like a monopoly in this market, if so what is the MC if not why?
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Indicate whether the statement is TRUE, FALSE, or UNCERTAIN and explain why. Answer 1 & 2 1. If a monopsonist faces a perfectly elastic supply curve, there will be no deadweightloss relative to the competitive outcome 2. In a Cournot duopoly market, the two firms agree to produce half of the monopolyoutput level for that market and split the resulting profit. Since the monopoly profit is the highest profit that can be obtained, the two firms will always stick to that agreement even if it’s not legally (or in any other way) binding.
Based on United States Census Bureau data for 2017, for the utilities (electricity and gas) industry the four firm concentration ratio (C4) is 16.2 percent and the Herfindahl-Hirschman index is 161.4. Why might the actual concentration, and therefore market power enjoyed by a specific utility company in a state, be greater than what is indicated by these numbers? These ratios are calculated for the entire country, and not for a specific city or state. Please give an explanation.
In India, Cisco’s market share of the Ethernet switch and router market is approximately 67 percent. Juniper and HP each have market shares of about 6.5 percent, and several other firms have somewhat smaller market shares. Draw a diagram showing the equilibrium in this dominant firm market. Identify the equilibrium price and the equilibrium quantity produced by the dominant firm and the competitive fringe firms. Illustrate what happens to the equilibrium price and the equilibrium quantity produced by the dominant firm and the competitive fringe firms if additional fringe firms enter the market
Firms Industry 1 Industry 2 Industry 3 Industry 4 1 65 70 35 50 2 15 15 35 50 10 10 30 4 Based on the Herfindahl-Hirschman index for each of the industries above, the industry with the most concentration of market power is: Industry 1 Industry 2 Industry 3 Industry 4
Consider the weekly market for gyros in a popular neighborhood close to campus. Suppose this market is operating in long-run competitive equilibrium with many gyro vendors in the neighborhood, each offering basically the same gyros. Due to the structure of the market, the vendors act as price takers and each individual vendor has no market power. The following graph displays the supply (S = MC) and demand (D) curves in the weekly market for gyros. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition. PRICE (Dollars per gyro) 5.0 4.5 4.0 3.5 3.0 2.0 1.5 1.0 0.5 0 0 10 20 30 Competitive Market 40 60 QUANTITY (Gyros) 50 70 80 S=MC D 90 100 PC Outcome (?) Now assume that one of the gyro vendors successfully petitions the neighborhood development board to obtain exclusive rights to sell gyros in the neighborhood. This firm buys up all the rest of the gyro food trucks in the area and begins to operate as a monopoly.…
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