Suppose that the most popular car dealer in your area sells 2.50 percent of all vehicles. Instructions: Enter your answers as whole numbers. a. If all other car dealers sell either the same number of vehicles or fewer, what is the largest value that the Herfindahl index could possibly take for car dealers in your area? b. In that same situation, what would the four-firm concentration ratio be? 8%

Suppose that the most popular car dealer in your area sells 2.50 percent of all vehicles. Instructions: Enter your answers as whole numbers. a. If all other car dealers sell either the same number of vehicles or fewer, what is the largest value that the Herfindahl index could possibly take for car dealers in your area? b. In that same situation, what would the four-firm concentration ratio be? 8%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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
3. Reuben and Simeon are duopolists producing jeans in a differentiated goods market. The market demand for Reuben's jeans is y₁ = 75 − P₁ + P2, while the market demand for 1 1 Simeon's jeans is y₂ = 75 − P2 + ₂P₁. Reuben's cost function is C₁(y₁) = 75y₁ while Simeon's cost function is C₂ (y₂) = 75y2. a) Calculate the Bertrand equilibrium in this market. Indicate each firm's price, output level, and profits. (Answer: p₁ = 100 USD, y₁ = 25 units) b) Find prices and output levels that would maximize joint profits, and calculate the maximum joint profits. c) Draw a payoff matrix using the results from a) and b) and determine the Nash equilibrium.
Step 1 of 2: Use the following table with the sample data to calculate the four-firm concentration ratio for the U.S. auto market. Round your answer to the nearest whole number if necessary. Market Shares in the U.S. Auto Market GM 18%18% Ford 16%16% Toyota 14%14% Chrysler 10%
1. which compete in quantities (Cournot -Nash equilibrium = C) 2. which compete in quantities with the first firm (the Leader) choosing the output first (Stackelberg competition = S). 3. which collude and choose quantities in order to maximize the joint profits (behave like two plants of a multiplant monopoly = M).
The table below shows revenue data for different firms producing refrigerators. Use the given information to find the market share of each firm. The "other" row is comprised of a number of small firms. Round each value to 2 decimal points. SI Firm % Acme Co Baluga, LLC Cran Inc Delta Co Eagle Inc Fox Inc What is the Four Firm Concentration Ratio? Other Revenue in $ 245.00 595.00 105.00 170.00 725.00 515.00 990.00 Market Share in % ← A - ← A ←
Suppose that the most popular car dealer in your area sells 25 percent of all vehicles. Instructions: Enter your answers as a whole number. a. If all other car dealers sell either the same number of vehicles or fewer, what is the largest value that the Herfindahl index could possibly take for car dealers in your area? b. In that same situation, what would the four-firm concentration ratio be? percent
Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percentages of all hamburgers sold): 26 percent, 24 percent, 20 percent, 12 percent, 9 percent, 6 percent, and 3 percent. Instructions: Enter your answers as a whole number. a. What is the four-firm concentration ratio of the hamburger industry in this town? Book percent Print b. What is the Herfindahl index for the hamburger industry in this town? erences c. If the top three sellers combine to form a single firm, what would happen to the four-firm concentration ratio and to the Herfindahl index? Four-firm concentration ratio = percent Herfindahl index =
What is the, HHI, Herfindahl-Hirschman Index for an industry where six companies each have a market share of 15% and one company which has a market share of 10%?
The table below shows market share data for different firms producing desks. Market Share in % 15 18 7 11 6 10 4 5 5 16 Firm Aardvark Inc Baluga, LLC Cran Inc Delta Co Echo Co Farriss Co Gum Drop Inc Hill Corp Indigo Corp Jackson Co What is the Herfindahl Hirschman Index (HHI) for this market? ← HHI 225 324 49 121 36 100 16 25 25 256 Suppose that Delta Co and Gum Drop Inc are considering a merger. What will the HHI be after this merger?
11. Suppose there is a duopoly of two identical firms, A and B, facing a market inverse demand of P = 140 – 0.5Q, and cost functions of CA = 20QA and Cg = 20QB respectively. a. Find the Cournot-Nash equilibrium and profit for each firm. b. Suppose that A acts as the leader in a Stackelberg model and B responds. What are the respective quantities and profits of each firm now? Is it advantageous to move first? c. If the firms were able to collude, how much additional profit could they earn if they switch from simple single pricing to perfect price discrimination? d. Graph and label equilibria on the inverse demand.
Help me understand part a-c