Carrot Computers and its competitors purchase touch screens for their tablet computers from several suppliers. The slx makers oftouch screens have market shares of, respectively, 19 percent, 18 percent, 12 percent, 18 percent, 21 percent, and 12 percent.Instructions: Enter your answers as a whole number.a. What is the Herfindahl index for the touch screen manufacturing industry?okb. By how much would a proposed merger between the two smallest touch screen makers increase the Herfindahl index?rintIs the government likely to challenge that proposed merger?brences(Click to select) :c. If Carrot Computers horizontally merges with its competitor Blueberry Handhelds, by how much would the Herfindahl index changefor the touch screen industry?

The gross domestic product (GDP) of a country is the total amount of goods and services it produces…

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, 12 percent, 18 percent, 21 percent, and 12 percent. Instructions: Enter your answers as a whole number. 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? Is the government likely to challenge that proposed merger? (Click to select) c. If Carrot Computers horizontally merges with its competitor Blueberry Handhelds, by how much would the Herfindahl index change for the touch screen industry?

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, 12 percent, 18 percent, 21 percent, and 12 percent. Instructions: Enter your answers as a whole number. 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? Is the government likely to challenge that proposed merger? (Click to select) c. If Carrot Computers horizontally merges with its competitor Blueberry Handhelds, by how much would the Herfindahl index change for the touch screen industry?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter15: Oligopoly And Strategic Behavior

Section: Chapter Questions

Problem 12P

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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.
Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percentages of all hamburgers sold): 23 percent, 22 percent, 18 percent, 12 percent, 11 percent, 8 percent, and 6 percent. Instructions: Enter your answers as a whole number. a. What is the four-firm concentration ratio of the hamburger industry in this town? Book percent Print b. What is the Herfindahl index for the hamburger industry in this town? erences c. If the top three sellers combine to form a single firm, what would happen to the four-firm concentration ratio and to the Herfindahl index? Four-firm concentration ratio = |percent Herfindahl index =
4. With an estimated market share of 60%, Atlas is the dominant company and the price leader inan oligopolistic steel industry. The remaining market share is distributed equally between tencompanies. Suppose that one of those ten companies, Norton, attempts to gain market share byundercutting the price set by Atlas.Calculate the “Four Firm Ratio” and Herfindahl-Hirschman Index “HHI” in the above-describedmarket and interpret your answer. What model can best resemble this market? Briefly explainthis model. In your opinion, what will be the effect of Norton’s attempt described above onAtlas’s market share: will it increase, decrease, or not affected at all? Justify your answer.
A firm (that produces a single type of product) has a long run Lerner index of 0.60 and marginal cost of $80. al Calculate the price charged by the firm for its product. (The firm charges the same price per unit of its product to all customers at all times.) b) Which industry is the firm more likely in: MONOPOLY, or MONOPOLISTIC COMPETITION? Carefully explain your answer. Your answer must clearly indicate the you understand the concepts: Lerner Index, Monopoly, and Monopolistic competition (Clearly label each answer and show all calculations that you do, or you will receive no credit for your answers)
Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percentages of all hamburgers sold): 23 percent, 22 percent, 18 percent, 12 percent, 11 percent, 8 percent, and 6 percent. Instructions: Enter your answers as a whole number. a. What is the four-firm concentration ratio of the hamburger industry in this town? percent b. What is the Herfindahl index for the hamburger industry in this town? c. If the top three sellers combine to form a single firm, what would happen to the four-firm concentration ratio and to the Herfindahl index? Four-firm concentration ratio = percent Herfindahl index =
Suppose that the top six firms in an industry have total annual sales of $150 billion, $100 billion, $90 billion, $60 billion, $50 billion, and $10 billion, respectively. Instructions: Round your final answers to the nearest whole number. a. What is the four-firm concentration ratio for this industry? percent b. What is the Herfindahl index for this industry? ces c. Suppose another industry has a Herfindahl index of 1,500. Are firms in the second industry likely to have more or less market power? (Click to select)
There is much evidence that large firms with considerable market power (firms such asmonopolies) may not maximize profits but may pursue quite different objectives such asgrowth or sales revenue maximization. What are the arguments put forward to defendmonopoly? Name any 5 Generally, the aim of a business is to maximize profit. Which point should a firm operateat in order to achieve maximum profit? By making use of a graph indicate clearly the pointat which a firm makes maximum profit and a point where a firm increase their output inorder to enhance profit as well as well as the points where they should reduce theirproduction if they want to enhance profit
8. Suppose there are two firms in the market. The market demand is Q=100-p and the marginal cost of production is constant at 40. What is the outcome of price and quantity and the total welfare if those two firms compete like perfect competition? What is the outcome of price and quantity and the total welfare when those two firms merge into a monopoly? What are the pre-merger HHI, post-merger HHI and change in HHI? How does the Horizontal Merger Guideline 2010 classify this proposed merger?
Table 17-9Only two firms, Acme and Pinnacle, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost. Price Quantity Total Revenues 70 0 0 65 100 6500 60 200 12000 55 300 16500 50 400 20000 45 500 22500 40 600 24000 35 700 24500 30 800 24000 25 900 22500 20 1000 20000 15 1100 16500 10 1200 12000 5 1300 6500 0 1400 0 Refer to Table 17-9. If Acme and Pinnacle operate to jointly maximize profits, then what is the price? Group of answer choices $45 $40 $35 $30
Table 17-9Only two firms, Acme and Pinnacle, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost. Price Quantity Total Revenues 70 0 0 65 100 6500 60 200 12000 55 300 16500 50 400 20000 45 500 22500 40 600 24000 35 700 24500 30 800 24000 25 900 22500 20 1000 20000 15 1100 16500 10 1200 12000 5 1300 6500 0 1400 0 Refer to Table 17-9. How much less do each of these firms earn in the Nash equilibrium than if they jointly maximize profits? Group of answer choices $250 $500 $750 $1000
Table 17-9Only two firms, Acme and Pinnacle, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost. Price Quantity Total Revenues 70 0 0 65 100 6500 60 200 12000 55 300 16500 50 400 20000 45 500 22500 40 600 24000 35 700 24500 30 800 24000 25 900 22500 20 1000 20000 15 1100 16500 10 1200 12000 5 1300 6500 0 1400 0 Refer to Table 17-9. If Acme and Pinnacle operate to jointly maximize profits and agree to share the profit equally, then how much profit will each of them earn? Group of answer choices $9,000 $8,750 $8,000 $6,750
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?