Suppose the cola market is divided as follows:FirmMarket Share (%)Coca-ColaPepsiGeneric Cola2614Royal Crownall others (20 fims)4.2.5a. What is the approximate Herfindahl index?Instructions: Round your answer to the nearest whole number.1049b. Based on this Herfindahl index calculation, how would you describe its market structure?Instructions: Round your answer to the nearest whole number.sufficiently competitivec. What is the four-firm concentration ratio?Instructions: Round your answer to to one decimal place.50

The Herfindahl Index(HHI) is calculated by squaring the market share for each firm (up to 50 firms)…

Suppose the cola market is divided as follows: Firm Coca-Cola Pepsi Generic Cola Royal Crown all others (20 firms) Market Share (%) 26 14 4. 2.5 a. What is the approximate Herfindahl index? Instructions: Round your answer to the nearest whole number. 1049

Suppose the cola market is divided as follows: Firm Coca-Cola Pepsi Generic Cola Royal Crown all others (20 firms) Market Share (%) 26 14 4. 2.5 a. What is the approximate Herfindahl index? Instructions: Round your answer to the nearest whole number. 1049

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 7 Suppose two firms (X and Y) want to merge together. X currently controls 50.59% of the market, and Y currently controls 35.96% of the market. If X and Y merge, by how many points will the HHI increase? with X and Y separate) Hint this is the value of (HHI with X and Y merged) - (HHI Round your answers to two (2) decimal places if necessary
Briefly discuss: price earning rastio, dividend valuation model and discounted cash flow methods. Practical problems associated with using valuation approaches.
Duncan Multinational Corporation is a global manufacturer and distributor of household appliances. It is based in China, United States, Trinidad, and the United Kingdom. Sixty percent (60%) of supplies are sent to various companies throughout the four countries. It also markets its supplies through social media and brand ambassador and retail clients can make orders over the phone and they ship the supplies upon demand.The main competition for Duncan Multinational Corporation comes from one U.S. firm and one Canadian firm. The U.S firm and Canadian firm have approximately 45% market share in Barbados, Guyana and Jamaica. The marketing and transportation costs in these countries are very high.Section 1 Duncan Multinational Corporation plans to penetrate either the Jamaican, Barbados or Guyana market. In 600 words, discuss two factors that deserve to be considered in deciding which market is more feasible? in 600 words, discuss a demand-related factor and supply-related factor, that may…
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
An industry has the following market shares: 30% 20% 10% 5% What is the Pre-merger index? What is the post-merger index? What is the increase or decrease in the index after the merger? Should a merger between the 1st and 3rd largest firms be allowed based on the Herfindhal Index? Why or why not
3. We consider the following situation between 2 firms. Firm A (the "acquirer") would like to take over firm T (the "target"). It does not know firm I's value; it believes that this value, when firm T is controlled by its own management, is at least $0 and at most $100, and assigns equal probability to each of the dollar values in this range (we assume that the value is distributed uniformly on this interval). Firm T will be worth 50% more under firm A's management than it is under its own management. Suppose that firm A bids p to take over firm 7; and firm T is worth x (under its own management). Then if T accepts A's offer, A's payoff is 2x-p and T's payoff is p; if T rejects A's offer, A's payoff is 0 and T's payoff is x. (a) Formalize this situation as a Bayesian Game (b) Find the Bayesian Nash Equilibria of this game.
Suppose we have two markets, A and B, each consisting of seven firms. The market shares of the 5 largest firms (ordered by market share) are shown in the table below. Firm rank Market share (%) Market A Market B 1 20 22 2 20 20 3 20 20 4 20 15 5 15 15 6 ? ? 7 ? ?
An industry has 50 firms, each with a market share of 2 percent. There is no foreign competition, entry into the industry is difficult, and no firm is on the verge of bankruptcy. a. If 20 of the firms in the industry seek to merge, the Herfindahl index would change from 120 to 1,600. 120 to 200. 200 to 1,720. 1,720 to 1,720. b. This merger would not be challenged. be challenged, because of the substantial change in the Herfindahl index only. be challenged, because of the value of the new Herfindahl index and the substantial change in the index. be challenged, because of the value of the new Herfindahl index only.
(REAL-WORLD APPLICATION) You are NOT required to read the oligopoly chapter in the textbook, but you already know quite a lot about it from our discussion of strategic interactions using game theory in weeks 2-3. This market structure is between monopoly and monopolistic competition, with only a handful of firms having a high degree of market power. Let's refresh your memory with the following example. Assume that the Australian low-cost airline industry consists of two firms and their situation can be represented by the following payoff matrix. Tigar Air Nothing Low Price More Advertising 0, 16 6, 6 Nothing 10, 10 2, 14 Jetstar Low Price 16, 0 12, 4 More Advertising 14, 2 4, 12 8, 8 a. Before solving the game, put yourself in the position of Jetstar and write down your action. Then independent of that, put yourself in the position of Tiger Air and write down your action. b. State all the dominated strategies in the full game, by which strategy they are dominated, and whether weakly or…