Indicate whether the statement is true or false, and justify your answer.Higher values of the Herfindahl–Hirschman Index indicate higher levels of competition in those markets.
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Indicate whether the statement is true or false, and justify your answer.
Higher values of the Herfindahl–Hirschman Index indicate higher levels of competition in those markets.
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- Based on arguments made by Friedman and Fama, which of the following requirements must be fulfilled for noise traders to affect markets in equilibrium? Select all that apply. Noise traders must be able to survive economically for a significant period of time All traders must be risk averse Technical trading must be profitable at least some of the time Noise trader behavior must be systematicIndicate whether the statement is true or false, and justify your answer.Consider the following theory due to Arrow (1963): nonprofits exist because for-profit firms are less trustworthy in the performance of actions that are hard to observe. According to this theory, government regulations requiring hospitals to report data on outcomes should lead to a lower share of nonprofit production in the hospital industry.True or False: Horizontal mergers between firms producing distant substitutes are more likely to harm economic welfare.
- A new market appears that works according to the rules of the Stackelberg model. The costs of firms on this market as a function of individual supply q is C(q) = f + Cq^2, where both F > 0, C > 0. The demand is P(Q) = A - BQ as afunction of total supply Q, with A > 0, B > 0. What is the quantity of followers on the market assuming free entry (as a function of A B C and F) Assume entry costs Z, what is the new equilibrium quantity of firms?Firms will choose a Grim Trigger strategy if they: believe high profits are sustainable. believe that the firms in the industry will compete with each other for a long time to come. have little control over the market price. are sure that cheating behavior will go unnoticed.The Tourist-Trap model describes a situation where the existence of a search cost, c, and price ignorance of buyers lead to an equilibrium in which all sellers practice the monopoly price. This result holds... (a) ... only when the number of sellers is small (b) ... only when search costs are high (c) ... for any search cost c > 0 (d) ... even when buyers can buy repeatedly at the same location thus gradually learning the prices practiced by other sellers
- Indicate whether each statement is true or false, and justify your answer.Most economists think that innovation is not random, and that pharmaceutical companies can steer their research toward profit opportunities.Antitrust enforcement of vertical relationships is generally focused on Question 2 options: The dominant firm using vertical contracts to extend market power to other levels of the supply chain Vertical contracts that increase the intensity of competition Vertical contracts that help consumers All of the aboveA market is dominated by five firms, each with an equal share of market sales. What is the Herfindahl-Hirschman Index for this market?
- Which is NOT true about the weak, semi-strong, and strong forms of the efficient markets? Under the weak form, only historical information is reflected in asset prices. Under the semi-strong form, both past and currently known information is reflected in prices. Under the strong form, all information, past and present, publicly known and private, is reflected in prices. Under all forms, price levels are quickly impacted by new information.What are the values of P1,P2,Q1,Q2 given the two commodity demand and supply model: Qd1=18−3P1+P2 Qs1=−2+4P1 Qd2=12+P1−2P2 Qs2=−2+3P2In order to create an effective incentive compensation scheme, you must Group of answer choices create adequate performance measures. have unlimited funds. offer a flat management structure. play a sequential game. have none of the above.