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Question 1 3 pts Some key characteristics of a monopoly market is Select] [Select) substitutes for the product: (Select) barr
Question 8 3 pts A five-firm industry has market shares equal: 65, 15, 10, 5, and 5. The industrys HHI = This industry highl
Question 7 2 pts In Industry 1, the four largest firms have market shares of 55%, 15%, 5%, and 5%. In Industry 2, the four la
Question 2 2 pts Fill in the missing barrier to entry: control of a key input of production, government protection with paten
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Answer #1

Question 1

1. price maker

2. No close substitutes

3. Strong

4. absolute market power

5. profit maximiser

Question 8

HHI formula -

HHI = 65^{2} +15^{2}+ 10^{2} +5^{2}+ 5^{2} =4600

Industry is highly concentrated. Merger is not likely to be apporved.

Question 7

Concentration ratio formula -

Industry 1

4CR=0.55+0.15+0.05+0.05=0.8

Industry 2

4CR=0.30+0.25+0.15+0.10=0.8

Both firms have same concentration ratio. Industry 2 is more likely to be allowed to be merged as the individual firms have less market share.

Question 2

Reasons for monopoly: Fill in a missing barrierto entry, control a key input of production, economies of scale, government protection with patents and copyrights.

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