**Which of the following is a shortcoming of concentration ratios as measures of monopoly power?**- ○ The data are for international products.- ○ They only show the dispersion of size among the top four firms.- ○ They do not account for interindustry competition.- ○ They do not pertain to the nation as a whole.**b.** Suppose that the five firms in industry A have annual sales of 30, 30, 20, 10, and 10 percent of total industry sales. For the five firms in industry B, the figures are 60, 25, 5, 5, and 5 percent. Calculate the Herfindahl index for each industry and compare their likely competitiveness.- Herfindahl index for industry A = [ ]- Herfindahl index for industry B = [ ]Your comparison of their likely competitiveness: Industry A will be (Click to select) more competitive / less competitive than industry B.

The four-firm concentration ratio is the ratio of total sales of the top four firms to the total…

Answered: Which of the following is a shortcoming…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Intel and Advanced Micro Devices make most of the chips that power a PC. What makes the market for PC chips a duopoly? The PC chip market is a duopoly if O A. at the efficient scale, two firms can satisfy the market demand OB. each firm can divide its consumers into two categories-business consumers and household consumers O C. the two firms can charge different prices for the same quality of PC chip O D. the market produces two goods Assume that Intel and Advanced Micro Devices have identical costs. The graph shows the market demand curve. Draw the average total cost curve of one firm if the chip market produces 800 chips an hour and other firms are prevented from entering. Label the curve. Draw a point on the average total cost curve at the efficient scale. 110- 100- 90- 80+ 70- 60+ 50- 40- 30- 20+ 10- 0- Price (dollars per chip) 0 $800 200 400 800 600 Quantity (chips per hour) >>> Draw only the objects specified in the question. D 1000 Q Q 1200
Some monopolies are regulated by setting a price that a monopolist cannot exceed over a specified period of time. This is called: O antitrust laws O cost-plus regulation O price cap regulation O regulatory capture
In the United States, antitrust laws O A. regard excess competition as a felony under Section 3 of the Sherman Act. O B. place a maximum limit of 125 firms that are allowed to compete in any market. O C. do not always prosecute firms if they have fixed their prices. D. do not allow one person to be a director of two competing firms if being a member "substantially lessens competition". E. break up a company if it is too large because "size itself is an offense."
Suppose that total demand for refrigerators at the market price is 15,000 units. If the LRAC curve reaches a clear minimum average cost at 5,000 units, then the industry structure must be Select the correct answer below: O perfectly competitive O a monopoly O an oligopoly O monopolistically competitive
3. Consider a market in which a monopolist would charge at a price of $10 for a particular good. Assume now the market is currently dominated by a pair of Bertrand duopolists who produce identical goods and compete on price in a one-shot game. They both face a marginal cost of $5. They start with colluding and agreeing to charge the monopoly price of $10 in an effort to maximize their profits. In equilibrium, the market price of the good will be.... (a) Over $10 (b) $10 (c) Between $5 and $10 (d) $5 (e) Less than $5 (f) None of the above Answer: 3d. A price war will break out, lowering the price to $5.
Assume that a pure monopolist and a purely competitive firm have the same unit costs. Contrast the two with respect to (a) price, (b) output, (c) profifits, (d) allocation of resources, and ( e) impact on the distribution of income. Since both monopolists and competitive fifirms follow the MC = MR rule in maximizing profifi ts, how do you account for the different results? Why might the costs of a purely competitive firm and those of a monopolist be different? What are the implications of such a cost difference?
Assume that two companies (A and B) are duopolists who produce identical products. Demand for the products is given by the following linear demand function:P = 200 - QA - QBwhere QA and QB are the quantities sold by the respective firms and P is the sellingprice. Total cost functions for the two companies areTCA = 1500 + 55QA + Q2ATCB = 1200 + 20QB + 2Q2BAssume that the firms act independently as in the Cournot model (i.e., each firmassumes that the other firm’s output will not change).a. Determine the long-run equilibrium output and selling price for each firm.b. Determine Firm A, Firm B, and total industry profits at the equilibrium solutionfound in Part (a).
D.In the middle of the twentieth century, major U.S.cities had multiple competing city bus companies.Today, there is usually only one and it runs as asubsidized, regulated monopoly. What do you supposecaused the change?
Assume the figure below represents the market for Turkeys. What is the dead-weight loss if this market is operating as a monopoly? Price 50 40 30 20 10 O $1500 O $4000 100 $1000 MR MC ATC Demand 200 300 400 500 There will not be a dead-weight loss since they will be operating at the market equilibrium Quantity
. Compare the quantity and price of an oligopoly tothose of a monopoly
In monopolistic competition equilibrium with symmetric fırms, firms enter until each firm earns O zero economic profits because price equals average cot. O positive monopoly profits because it sells a differentiated product. O positive economic profits only if it engages in international trade O negative economic profits because of fixed costs.
The table below shows revenue data for different firms producing cell phones. Use the given information to determine the 4 Firm Concentration ratio. Firm Revenue in $ Market Share in % Aardvark Inc 490 19 Buzzy Co 11 285 Cran Inc 310 12 Delta Co 460 18 Echo Co 505 20 Farriss Co 515 20 What is the Four Firm Concentration Ratio? Is this market concentrated? OYes ONo EPIC

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