Foundations of Economics, Student Value Edition Plus MyLab Economics with eText -- Access Card Package (8th Edition)
8th Edition
ISBN: 9780134641843
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 17, Problem 2MCQ
To determine
To Choose:
The correct ratio and the correct percentage among the given options need to be determined.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
3) Why would firms advertise? Give some examples of a market structure where firms need to advertise to gain a fair advantage over their rivals and also identify the type of market structure?
Give typing answer with explanation and conclusion
(Mergers and Public Policy) Calculate the Herfindahl-Hirschman Index (HHI) for each of the following industries.Which industry is the most concentrated?a. An industry with five firms that have the followingmarketshares: 50 percent, 30 percent, 10 percent,5 percent, and 5 percentb. An industry with five firms that have the followingmarketshares: 60 percent, 20 percent, 10 percent,5 percent, and 5 percentc. An industry with five firms, each of which hasa 20 percent market share
Carrot Computers and its competitors purchase touch screens for their tablet computers from several suppliers. The six makers of touch screens have market shares of, respectively, 19 percent, 18 percent, 14 percent, 16 percent, 20 percent, and 13 percent. a. What is the Herfindahl index for the touch screen manufacturing industry? b. By how much would a proposed merger between the two smallest touch screen makers increase the Herfindahl index? Would the government be likely to challenge that proposed merger? c. If Carrot Computers horizontally merges with its competitor Blueberry Handhelds, by how much would the Herfindahl index change for the touch screen industry?
Chapter 17 Solutions
Foundations of Economics, Student Value Edition Plus MyLab Economics with eText -- Access Card Package (8th Edition)
Ch. 17 - Prob. 1SPPACh. 17 - Prob. 2SPPACh. 17 - Prob. 3SPPACh. 17 - Prob. 4SPPACh. 17 - Prob. 5SPPACh. 17 - Prob. 6SPPACh. 17 - Prob. 7SPPACh. 17 - Prob. 8SPPACh. 17 - Prob. 9SPPACh. 17 - Prob. 10SPPA
Ch. 17 - Washtenaw Dairy in Ann Arbor, Michigan, sells 63...Ch. 17 - Prob. 2IAPACh. 17 - Prob. 3IAPACh. 17 - Prob. 4IAPACh. 17 - Prob. 5IAPACh. 17 - Use the following information to work Problems 5...Ch. 17 - Prob. 7IAPACh. 17 - Prob. 8IAPACh. 17 - Prob. 9IAPACh. 17 - Prob. 1MCQCh. 17 - Prob. 2MCQCh. 17 - Prob. 3MCQCh. 17 - Prob. 4MCQCh. 17 - Prob. 5MCQCh. 17 - Prob. 6MCQCh. 17 - Prob. 7MCQ
Knowledge Booster
Similar questions
- Question 6 (a) Why is Perfect Competition considered to display high level of economic efficiency? (b) How does monopoly result in a dead-weight loss? Illustrate with diagram. (a) How is oligopoly different from monopolistic competition? (b) Illustrate and explain how the oligopolistic firms determines their collective profit by maximizing price and output levels when they collude and act like a cartel (monopoly). Question 7 (a) What are the main causes of market failure? Give one example and illustrate using a diagram. (b) Explain the difference between private costs and social costs. (c) Government of Country X is considering implementing a tax on fizzy drinks. Using a demand and supply diagram, illustrate what effect the tax will have on the market of fizzy drinks. (d) For what purposes does government use taxes-both at micro and macroeconomic level?arrow_forwardQuestion 1 Assume the market for a product can be described as a Cournot duopoly with two identical firms. The Nash-equilibrium in this market is that the two firms produce the same quantity. Hence, they will have identical market shares, each will have 50%. Assume that firm 1 decides to invest in a technology that reduces its marginal costs. a) What will happen to the two firms market shares? You must explain how you find the answer. b) What will happen to total production and the price of the product? Again, explain your answer.arrow_forward(a) There are two companies in the world that produce large passenger aircraft, Boeing, and Airbus. How would you characterize the market for large passenger aircraft, monopoly, perfectly competitive, monopolistically competitive or Oligopoly? Please explain. Large passenger aircraft are defined as aircraft than can carry more than 150 passengers. (b) The market for telephone services has become more competitive over time with the advancement of technology in the industry. Technology in the aircraft manufacturing industry has also advanced significantly. Why hasn’t this improvement in technology led to an increase in competition (Boeing and Airbus have been the only manufacturers in this industry for many years)? Please explain.arrow_forward
- 1. There are 10 firms in an industry, and each firm has a market share of 10 percent. The industry’s Herfindahl index is a. 10. b. 100. c. 1,000. d. 10,000. 2. In the small town of Geneva, there are five firms that make watches. The firms’ respective output levels are 30 watches per year, 20 watches per year, 20 watches per year, 20 watches per year, and 10 watches per year. The four-firm concentration ratio for the town’s watch-making industry is: a. 5. c. 90. b. 70. d. 100. 3. Which of the following best describes the efficiency of monopolistically competitive firms? a. Allocatively efficient but productively inefficient. b. Allocatively inefficient but productively efficient. c. Both allocatively efficient and productively efficient. d. Neither allocatively efficient nor productively efficient.arrow_forward11. Which of the following market types has all firms selling products so identical that buyers do not care from which firm they buy? a. monopoly b. monopolistic competition c. perfect competition d. oligopolyarrow_forwardQuestion 25 Consider two cigarette companies, PM Inc. and Brown Inc. If neither company advertises, the two companies split the market and earn $60 million each. If they both advertise, they again split the market, but profits are lower by $20 million since each company must bear the cost of advertising. Yet, if one company advertises while the other does not, the one that advertises attracts customers from the other. In this case, the company that advertises earns $70 million while the company that does not advertise earns only $30 million. What will these two companies do if they behave as individual profit maximizers? Both companies will advertise. Brown Inc. earns $40. Neither company will advertise. Brown Inc. earns $60. Both companies will advertise. PM Inc. earns $60. One company will advertise, and the other will not. Brown Inc. earns $70.arrow_forward
- Question 1 (40 points) Consider a homogeneous duopoly market where two firms compete in prices. Demand is given by D 8-2p, where p is price. Marginal cost of production is 2. a)lf the individual capacity of both firms is 2, is there an equilibrium in pure strategies? If so, what are the equilibrium prices? If not, provide a proof. b) Consider then that a third firm enters the market and that all three firms have a capacity of 2. Does an equilibrium in pure strategies exist? If so, what are the equilibrium prices? If not, why not? c) Does you answer under b) change if the firms' capacities are respectively equal to 1, 2 and 3?.arrow_forward12. Which of the following does NOT fall into the degrees of competition continuum? A) Perfect competition B) Monopolistic competition. C) Competitive advantage D) Oligopolyarrow_forwardUnsure which is the correct answers Suppose that three firms make up the entire wig manufacturing industry. One has a 50% market share, and the other two have a 25% market share each. The Herfindahl index of this industry is a. 3,750 b. 1,000 c. 10,000 d. 5,000 e. 2,500 Mane Attraction, one of the firms with a 25% market share in the wig manufacturing industry, leaves the market. This would cause the Herfindahl index for the industry to __-- a. remain the same b. fall c. rise The largest possible value of the Herfindahl index is 10,000 because: a. an index of 10,000 corresponds to 100 firms with a 1% market share each b. an index of 10,000 corresponds to a monopoly firm with 100% market share c. an industry with an index higher than 10,000 is automatically regulated by the Justice Departmentarrow_forward
- Please do not copy the answer off of Chegg. It is a different question. The profits of the four major networks (CBS, NBC, ABC and Fox) depend significantly on the ratings of its prime time shows. The higher the ratings, the higher the price the network can charge for advertising and the higher the profits of the network. To keep things simple, we will focus on two networks, CBS and NBC, and two of the prime time spots, 8-9PM and 9-10PM. Each network needs to decide which time slot to place its hit show, 8-9PM or 9-10PM. The other time slot will be filled by a run of the mill show. The following payoff matrix shows the total number of viewers (in millions) if each network places its hit show in each of the time slots: CBS 8-9PM time slot 9-10PM time slot NBC 8-9PM time slot 100, 110 85, 120 9-10PM time slot 120, 40 70, 90 If you are the program manager for CBS, what time slot would you place your hit TV show (assuming that your goal is to…arrow_forwardThe sum total set of interrelationships that establish the manner in which competitors behave in an industry could be referred to as competitive dynamics.Required: 1. Briefly explain what competitive rivalry is? 2. Explain what competitive behaviour is and the three factors that drive competitive behaviour 3. With the aid of a diagram explain the model of competitive rivalry and how a strategist can use that understanding to develop strategies that facilitate the attainment of higher financial performancearrow_forward1. What are the 5 characteristics of perfect competition? 2. Define the followings? A. Monopoly B. Oligopoly C. Duopoly D. Perfect competition E. Knockoffs 3. What is a Resource Market? 4. What are the 4 types of resources in economics and define each? 5. What is an example of game theory in economics? 6. If you are the manager/owner of the company, what will you do to solve the negative effect of perfect competition?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc