Which of the following is a shortcoming of concentration ratios as measures of monopoly power?O The data are for international products.O They only show the dispersion of size among the top four firms.O They do not account for interindustry competition.O 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 firmsin industry B, the figures are 60, 25, 5, 5, and 5 percent. Calculate the Herfindahl index for each industry and compare their likelycompetitiveness.esHerfindahl index for industry A =Herfindahl index for industry B =vthan industry B.Your comparison of their likely competitiveness: Industry A will be (Click to select)(Click to select)more competitiveless competitive

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…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.6P

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Is it true that the four-firm concentration ratio puts more emphasis on one or two very large films, while the Herfindahl-Hirshmau Index puts more emphasis on all the films in the entire market? Explain briefly.
For many years, the Justice Department has tried to break up large firms like IBM, Microsoft, and most recently Google, on the grounds that their large market share made them essentially monopolies. In a global market, where U.S. films compete with firms from other countries, would this policy make the same sense as it might in a purely domestic context?
When OPEC raised the price of oil dramatically in the mid-1970s, experts said it was unlikely that the cartel could stay together over the long term-that the incentives for individual members. to cheat would become too strong. More than fort),r years later, OPEC still exists. Why do you think OPEC has been able to beat the odds and continue to collude? Hint: You may wish to consider non-economic reasons.
7. Suppose that the inverse market demand for pumpkins is given by P = $10-0.050. Pumpkins can be grown by any- one at a constant marginal cost of $1. ena. If there are lots of pumpkin growers in town so that the pumpkin industry is competitive, how many pumpkins will be sold, and what price will they sell for? b. Suppose that a freak weather event wipes out the pumpkins of all but two producers, Linus and Lucy. Mesob 0 17050
If the monopoly in the figure were to be broken up into many small firms, the competitive equilibrium in the market would be Dolaas ATC .... R O at point I, with price at $D and quantity at Q units O at point H, with price at E and quantity at R units O at point J, with price at $C and quantity at Punits O at point G, with price at $F and quantity at S units
Which of the following most accurately explains a general distinction between oligopolists that advertise and those that do not? O Unlike nonadvertising oligopolists, advertising ones allocate resources inefficiently, charge a higher price, and restrict output so that price exceeds average cost. O Advertising oligopolists decrease the price to increase sales, whereas nonadvertising ones increase prices to increase profits. O Advertising oligopolists compete using product differentiation instead of price reductions, whereas nonadvertising firms collude to form a cartel to maximize joint profits. O Advertising oligopolists set prices and output quotas to maximize joint profits, whereas nonadvertising ones use product differentiation.
What had Alcoa done that made the judge find it guilty of being a monopoly? a. Alcoa had used predatory pricing to keep new firms out of its marketb. Alcoa had engaged in price fixingc. Alcoa had never tried to monopolize the aluminum market, but its policy of building capacity to meet future demand had the effect of giving it a large market share that made it a de facto monopolyd. Alcoa had used tying contracts to drive rivals out of the markete. Alcoa had used price discrimination to acquire a monopoly Following its near bankruptcy in 1922, General Motors pioneered the decentralized management structure in which the firm was reorganized into semi-independent profit centers. Vice-presidents were appointed to manage these profit centers and were told that their bonuses would depend on the profitability of their division. This reorganization was designed to a. reduce management costsb. better capture economies of scalec. create a ratchet effect that would drive managers to perform…
. Compare the quantity and price of an oligopoly tothose of a monopoly
Answer the following questions, which relate to measures of concentration: a. What is the meaning of a four-firm concentration ratio of 60 percent? 90 percent? What are the shortcomings of concentration ratios as measures of monopoly power?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.
The Competition Bureau in Canada wants to increase competition and reduce monopoly power. Thus it it worries about industry concentration in Canada. Let's assume that the Canadian halibut processing industry there are only two firms(duopoly). Under such a market structure, if one of the halibut processing firm increases its price, then the other firm in the halibut processing industry can: keep the price of its processed halibut constant and thus increase its market share. keep its price of its processed halibut constant and thus decrease its market share. decrease its price of its processed halibut and thus decrease its market share. try to achieve economies of scale. increase its price of its processed halibut and thus increase its market share.
Monsanto holds significant regional monopoly power-in some regions they are a true monopoly being the only seller of agriculture seeds. If the elasticities of demand, JEDI, for soybean seeds is 3.5, and 3 for corn, then the profit-maximizing price (relative to marginal cost) for soybeans is times marginal cost, and the price is times marginal cost for corn. Round to one decimal if needed. A Moving to another question will save this response. « >
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