Question

Suppose an industry originally consists of 11 firms (A, B, C, D, E, F, G, H, I, J & K) with the following market shares: Firm(s): A B C D E F G thru K Market Share: 20% 20% 15% 15% 10% 10% 2% each Now suppose Firms D & E merge. How will federal antitrust regulators (the Department of Justice and the Federal Trade Commission) respond? A. Merger will be allowed. B. Merger is unlikely to be challenged. C. Merger may be challenged. D. Merger is likely to be challenged

Suppose an industry originally consists of 11 firms (A, B, C, D, E, F, G, H, I, J & K) with the following market shares: Firm(s): A B C D E F G thru K Market Share: 20% 20% 15% 15% 10% 10% 2% each Now suppose instead that Firms G, H, I, J & K merge. How will federal antitrust regulators (the Department of Justice and the Federal Trade Commission) respond? A. Merger will be allowed. B. Merger is unlikely to be challenged. C. Merger may be challenged. D. Merger is likely to be challenged.

Select ALL that are true out of the following: A. Economies of scale can be a main barrier of entry for firms looking to enter a monopolistic market. B. If an industry is a monopoly, the monopolist's Marginal Cost curve is the same as its supply curve. C. In the long-run equilibrium of monopolistically competitive markets, firms produce at minimum average total cost. D. In a monopolistically competitive market, a firm's Marginal Revenue curve is the same as its Demand curve.

Acme, Inc., a profit-maximizing firm with market power, finds that when it sets the of its product is $50, it's marginal revenue of a firm is $30.

• Calculate its elasticity of its demand.  E_D = - ____________
• The percentage of the $50 price contributes toward fixed costs and/or profits (after covering marginal costs) is ___________-%.
  

Answer 1

Answer for question

1.a

2.a

3. None of the four options are true

4.Elasticity of demand = -2.5