Suppose thata 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? percent b. What is the Herfindahl index for the hamburger industry in this town? 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 =

Suppose thata 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? percent b. What is the Herfindahl index for the hamburger industry in this town? 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 =

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Economics: Industrial Economics Question: A duopoly exists in the market for lumber in a town. It costs the first company, Big Cutters, $16 per cord of wood while it costs the second company, Pine Stackers, $10 per cord of wood. The local market demand curve for wood is Q-31,000-100P. Assume each has the capacity to serve the entire market and that they can only price in whole dollar amounts (i.e.$30, not $29.99). Assume initially that Cutters and Stackers decide to collude and split the market. How many cords of wood will they sell? Choices: A. 12,000 B. 9,000 C. 15,000 D. 20,000 2. What will be the price they charge? Choices: A. 190 B. 210 C. 110 D. 160 3. How much will Big Cutters produce? Choices: A. 9,000 B. 4,500 C. 0 D. 15,000 Now assume that collusion is not possible. 4. What is the Nash Equilibrium quantity that Pine Stackers Choices: A. 0 B. 15,300 C. 14,700 D. 29,500 5. What is the Nash Equilibrium price? Choices: A. 15 B. 112 C. 11 D. 157 Thank you for your…
please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly
The following table presents information on the production of five firms that produce all of the output in an industry. Firm Output (units) A 600 B 600 C 500 D 500 E 500 Instructions: Round your answers to two decimal places. a. What is the four-firm concentration ratio for this industry? % b. What is the Herfindahl-Hirschman Index for this industry?
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Coke and Pepsi dominate the cola market. Suppose that the marginal cost of making cola is $2. Assume also that the demand for cola is given by the following table: Price $8 7 6 5 4 3 2 1 Quantity 5 cans 6 7 8 9 10 11 12 Suppose Coke and Pepsi both supply cola. They form a cartel and agree to cooperate on how much soda to produce. In this cartel case, how many bottles of cola would be sold? Type your answer...
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3. There are two chicken fried steak restaurants operating in a small west Texas town: Cow Tipper Café and Steak to the Heart Diner. Once a month they have to send their new menus to the printer when they have to decide on whether or not to charge a high price or a low price for a chicken fried steak dinner. Once their menus are printed, they can't change their pricing. Since the two restaurants use separate printing companies, each restaurant's pricing decision remains secret until the printed menus are delivered. The payoff matrix for the restaurants is below; the first entry in each cell is Cow Tipper Café's daily profit and the second entry is Steak to the Heart Diner's daily profit. Cow Tipper Café High Price Low Price Steak to the Heart Diner Low Price $350, $300 $450, $400 High Price $500, $350 $375, $475 a. What market structure do these two firms operate in? Explain your answer. b. If Steak to the Heart Diner chooses a high price, what pricing option is better for Cow Tipper…
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