A student in a managerial economics class calculated the four-firm concentration ratio and HHI for industries A and B. What is the proper conclusion she can draw from the following findings? Industry A Industry B Four-Firm C 0.9 1 HHI 3,200 2,500 Multiple Choice C4 is higher for industry A while the HHI is higher for industry B. This inconsistency must be due to a calculation error. The market power of firms in industry A is greater than that in industry B. Neither industry is perfectly competitive. Industry B is a monopoly.

A student in a managerial economics class calculated the four-firm concentration ratio and HHI for industries A and B. What is the proper conclusion she can draw from the following findings? Industry A Industry B Four-Firm C 0.9 1 HHI 3,200 2,500 Multiple Choice C4 is higher for industry A while the HHI is higher for industry B. This inconsistency must be due to a calculation error. The market power of firms in industry A is greater than that in industry B. Neither industry is perfectly competitive. Industry B is a monopoly.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter11: Monopolistic Competition, Oligopoly, And Game Theory

Section: Chapter Questions

Problem 3WNG

See similar textbooks

	Industry A	Industry B
Four-Firm C	0.9	1
HHI	3,200	2,500

Similar questions

How is cross elasticity and income elasticity relevant to Indigo’s managerialdecision making?
.A measure called Herfindahl-Hirschman Index is used to measure the degree of competition in an industry. The HHI is the square of each firm’s market share summed over the firms in the industry. (Where a market share is the percentage of sales in the market accounted for by that firm). For example, if an industry contains only three firms and their market shares are 60%, 25%, and 15% then the HHI (by squaring each firm’s share and summing them) is 4450. Some economists classify the market structures according to HHI scores. An HHI below 1,500 indicates a strongly competitive market, between 1,500 and 2,500 indicates a somewhat competitive market, and over 2,500 indicates an oligopoly. Given the information in the table, calculate the HHI in this industry. If yahoo and Bing were to merge, what would the HHI be? Google 67% Yahoo 18 Bing 11 Ask 3 AOL 1
What is the principal-agent problem? Have you ever worked in a setting where this problem has arisen? If so, do you think increased monitoring would have eliminated the problem? Why don’t fifirms simply hire more supervisors to eliminate shirking?
Hand written solutions are strictly prohibited A sporting league has 8 teams. At the end of a season, team CM who was member owned doesnt renwe their license and leaves the league. For the next year's season, a private owner is awared the position for a new team (MM) which is private owned. Using a two team league model, explain what will happen to the talent distribution and unit cost of talent in the two team league compared to the previous year. Assume that: CM was a win maximiser MM is a profit maximiser Thr other club is a member owned win miximiser and generates the most revenue. This team name is MV The lower revenue generate by MM is the exact same as the one made by CM. The player labour market is characterised by players being free agents so no labour interventions no salary cap etc.
In theory, the discriminatory firm will go out of business because: A its MPL is lower than nondiscriminatory firm B nondiscriminatory firms generate more revenue C discriminatory firms are being sanctioned D No one will work for them. Ethe nondiscriminatory firm has lower cost
Assume there are two companies in the region, A and B. You currently work for Company B. Both companies service the entire market and have a combined market share of 100%. At the start of the period, A and B split the market evenly with 50% share each. However, A has adopted a new customer retention tool and has projected the following switching matrix. TO FROM A B A 0.8 0.2 B 0.3 0.7 Given this switching matrix. 1 - What is the projected Market Share for Company A next period? 2- Assume that each customer has a profitability of $30 each year. There are 10,000 customers in the market. How much profit per year, in the long run and assuming no other costs or changes to the market, can we assume that B will lose due to this new technology compared to their prior position?
Consider Figure 9.1. Assume SFK and Timken merge to become the MVD Company with new cost reductions, indicated by MC1=AC1, which result from changes in work by MVD Company employees that lead to higher worker productivity. Compare to the original competitive equilibrium, the effect of MVD Company's formation on welfare now isA.) a gain of $5.50B.) a gain of $2.50C.) a loss of $5.50D.) no change .
What is the likelihood that firms would enter the market in the short-run? Use COVID-19 as a market condition to elaborate the likelihood and further elaborate an exit strategy if one exists.
14. Name four major difference conditions of the market model termed perfect or pure competition. Explain their major implications for the behavior of the firm. Briefly for managerial economics class
Not for profit hosptials, do they eliminate the need to have a for-profit hosptial?
The top six firms in an industry have a total sales of the following respectively $54million, $47million, $45million, $40million, $30million, $25million; total industry sales are $261million. for this industry, what is the firm 4-firm concentration ratio? based on the value calculated, what market structures does this industry represent? Why? if the third and the six largest firms are anted to merge, what do you think the department of justice Would do? Why?
Question: Meridiana is a French manufacturing firm and there are serious trust deficits between the management and the employee union. The employee union wants that in the core decision making team of Meridiana, which consists of six people, at-least one must be selected from the employee union. Is it a good move from the point of view of employee union? Discuss in relation to the Zimbardo’s prison experiment.