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##### There are four firms in an industry with the following market shares:

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**Question**

DQ1. There are four firms in an industry with the following market shares;Firm 1;30%;Firm 2;25%;Firm 3;25%;Firm 4 20%;a) Calculate the Herfindahl Hirschman Index for the industry.;b) What is the number of effective competitors in this market? Show your calculation.;DQ 2. Suppose the demand curve for a monopolist is given as;Qd = 500- P;MR = 500 - 2Q;The monopolist has a constant marginal and average total cost of $50 per unit.;a) Determine the monopolist's profit-maximizing price and output.;b) Calculate the monopolist's profit.;c) What is the Lerner Index for the industry?;DQ 3. There are two industries, A and B, and each industry consists of four firms. However, each of the four firms in;industry A has a 25% market shares while those firms in industry B have 80% 10%, 5% and 5% market;respectively..;a) Calculate the three- and four-firm concentration ratios for each industry.;b) Calculate the Hirfindahl Hirschman Index for each industry.;c) Are these industries equally concentrated? Explain your answer.

Paper#31058 | Written in 18-Jul-2015

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