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Consider the tables displaying market share data for the largest firms in two industries. Suppose that...
Market concentration Suppose that there are 10 firms in a market, and each of them has...
Market concentration Suppose that there are 10 firms in a market, and each of them has an equal market share. What is the value of the Herfindahl-Hirschman Index (HHI) in this market? Suppose instead that in this market one firm dominates such that it has a 90% market share, while the remaining nine firms each have an equal share of the remainder. What is the value of HHI in this case? (Hint! 10% of the market is divided among 9 firms, so each...
Market share in the Widget industry Firm name Market share Big W 50 Widico 40 Widgotech...
Market share in the Widget industry Firm name Market share Big W 50 Widico 40 Widgotech 9 Widgette 1 Using the market shares in the table above, if Big W wants to buy Widgette, the Federal Trade Commission will probably approve the merger because the industry is moderately concentrated and the increase in the Herfindahl-Hirschman index (HH) is small enough. o block the merger because the industry is highly concentrated (HHI exceeds 2,500) and the increase in the HHI is...
Suppose four firms have market shares of 30%, 30%, 20% and 20%. What is the Herfindahl-Hirschman...
Suppose four firms have market shares of 30%, 30%, 20% and 20%. What is the Herfindahl-Hirschman Index for this market? 10000 2600 100 25 Question 18 What is the Herfindahl–Hirschman Index for a market with 100 firms, each with 1% market share? 10000 1000 100 1
Suppose an industry has 10 firms, each with an equal 10 percent share of the market....
Suppose an industry has 10 firms, each with an equal 10 percent share of the market. According to the Herfindahl-Hirschman Index (HHI), if two firms propose to merge, will the Department of Justice and the Federal Trade Commission allow it? I need answers for all three questions A) First, the HHI before the proposed merger is _____ B) With the proposed merger, the HHI is ______ C)The Department of Justice and the Federal Trade Commission _________ challenge the proposed merger....
Consider two industries, industry W and industry X. In industry W there are five companies, each...
Consider two industries, industry W and industry X. In industry W there are five companies, each with a market share of 20% of total sales. In industry X, there are six companies. One company has a 50% market share and each of the other five firms has a market share of 10%. a. Calculate the four-firm concentration ratio for each industry. b. Calculate the Herfindahl-Hirschman Index (HHI) for each industry. c. What do the values of the two concentration measures imply about the...
The bicycle industry consists of seven firms. Firms 1, 2, 3, 4 each has 10% market...
The bicycle industry consists of seven firms. Firms 1, 2, 3, 4 each has 10% market share, and firms 5,6,7 each has 20% market share. Using the concentration measures, answer the following questions: (i) Calculate 4-firm concentration ratio for this industry. (ii) Calculate the Herfindahl-Hirschman index (HHI) for this industry. (iii) Now, suppose that firms 1 and 2 merge, so that the new firm will have a market share of 20%. 1) Calculate the post merger I(x) 2) Calculate the...
based only on the knowledge that the preserver market share of two firms proposing to merg...
based only on the knowledge that the preserver market share of
two firms proposing to merg
14. Based only on the knowledge that the premerger market share of two firms proposing to merge was 25% and 20%, an economist working for the Justice Department was able to determine that, if approved, the postmerger HHI would increase by 1000. How was the economist able to draw this conclusion without the knowledge of the other firms' market shares? (16 points)
9. The market for pizza is perfectly competitive and has 1,000 firms. Each firm is identical....
9. The market for pizza is perfectly competitive and has 1,000 firms. Each firm is identical. Describe each firm in long-run equilibrium. In long-run equilibrium, each firm is - O A. making zero economic profit OB. making positive economic profit C. incurring an economic loss OD. just covering total variable cost ID: 12.4 Test B 3 10. There are five firms in a market and the market shares of the firms are 35 percent, 25 percent, 20 percent, 15 percent,...
Consider the following payoff matrix in which the numbers indicate the profit in millions of dollars...
Consider the following payoff matrix in which the numbers
indicate the profit in millions of dollars for an oligopoly based
on either a high-price or a low-price strategy.
a. Situation
1: Each firm chooses a high-price
strategy.
Result: Each firm
will earn $ 200 million in profit for a total of $ 400 million for
the two firms.
b. Situation 2: Firm X chooses a
low-price strategy while Firm Y maintains a high-price
strategy.
Result: Firm X will earn $250...
Consider two industries in which firms hold the following market shares: Industry A: 25%, 20%, 18%,...
Consider two industries in which firms hold the following market shares: Industry A: 25%, 20%, 18%, 15%, 8%, 7%, 4%, 2%, 1% Industry B: 30%, 10%, 9%, 8%, 8%, 8%, 8%, 6%, 6%, 5%, 2% What are the concentration ratios for each industry? Which is more competitive?
Market share in the Widget industry Firm name Market share Big W 50 Widico 40 Widgotech 9 Widgette 1 Using the market shares in the table above, if Big W wants to buy Widgette, the Federal Trade Commission will probably approve the merger because the industry is moderately concentrated and the increase in the Herfindahl-Hirschman index (HH) is small enough. o block the merger because the industry is highly concentrated (HHI exceeds 2,500) and the increase in the HHI is...
based only on the knowledge that the preserver market share of
two firms proposing to merg
14. Based only on the knowledge that the premerger market share of two firms proposing to merge was 25% and 20%, an economist working for the Justice Department was able to determine that, if approved, the postmerger HHI would increase by 1000. How was the economist able to draw this conclusion without the knowledge of the other firms' market shares? (16 points)
9. The market for pizza is perfectly competitive and has 1,000 firms. Each firm is identical. Describe each firm in long-run equilibrium. In long-run equilibrium, each firm is - O A. making zero economic profit OB. making positive economic profit C. incurring an economic loss OD. just covering total variable cost ID: 12.4 Test B 3 10. There are five firms in a market and the market shares of the firms are 35 percent, 25 percent, 20 percent, 15 percent,...
Consider the following payoff matrix in which the numbers
indicate the profit in millions of dollars for an oligopoly based
on either a high-price or a low-price strategy.
a. Situation
1: Each firm chooses a high-price
strategy.
Result: Each firm
will earn $ 200 million in profit for a total of $ 400 million for
the two firms.
b. Situation 2: Firm X chooses a
low-price strategy while Firm Y maintains a high-price
strategy.
Result: Firm X will earn $250...
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