The industry price elasticity of demand for good X is −1.5. The price elasticity of demand for the output of an individu...
The industry price elasticity of demand for good X is −1.5. The price elasticity of demand for the output of an individual firm producing good X in this industry −9. From this we can conclude that:
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individual firms have significant market power.
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the HHI for this industry is 1,667.
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this industry is highly concentrated.
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None of the options.
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individual firms have little market power.
Homework Answers
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individual firms have little market power.
Explanation: Individual firms have very little market power as the demand faced by a firm is much more elastic as compared to the demand faced by the industry.
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The industry price elasticity of demand for good X is −1.5. The price elasticity of demand for the output of an individu...
The price elasticity of demand for the output a representative firm in the petroleum industry is...
The price elasticity of demand for the output a representative firm in the petroleum industry is −1.25. An industry publication recently reported that the Rothschild index for the petroleum industry is 0.88. Based on this information, you know that the price elasticity of demand for the output of an individual firm in the petroleum industry is: 1.45. −0.37. 1.10. −1.45. −1.10.
The price elasticity of demand for the output a representative firm in the petroleum industry is...
The price elasticity of demand for the output a representative firm in the petroleum industry is −1.25. An industry publication recently reported that the Rothschild index for the petroleum industry is 0.88. Based on this information, you know that the price elasticity of demand for the output of an individual firm in the petroleum industry is: −0.37. −1.45. −1.10. 1.10. 1.45.
YULDTIUNT If the own-price elasticity of demand for your firm's good is -1.5, and if your...
YULDTIUNT If the own-price elasticity of demand for your firm's good is -1.5, and if your price is currently set at the level that makes your customers' quantity demanded equal to the quantity you are producing, then you can increase your total revenue flow by: decreasing your output level but keeping your price at its current level. none of the other answers. decreasing your output level and increasing your price. increasing your output level and decreasing your price.
true/false : price elasticity of demand for good X is positive. We conclude that good X...
true/false : price elasticity of demand for good X is positive. We conclude that good X is an inferior good. Explain why.
Assume there is a decrease in the market demand for a good sold by price-taking firms...
Assume there is a decrease in the market demand for a good sold by price-taking firms that are initially producing the profit-maximizing level of output. For the individual firm, this would result in: Question 10 options: a decrease in both price and the profit-maximizing quantity of output. a decrease in price and increase in the profit-maximizing quantity of output. an increase in both price and the profit-maximizing quantity of output. an increase in price and decrease in the profit-maximizing quantity...
Consider an industry where demand has constant price elasticity and firms compete in output levels. In...
Consider an industry where demand has constant price elasticity and firms compete in output levels. In an initial equilibrium, both firms have the same marginal cost, c. Then Firm 1, by investing heavily in R&D, manages to reduce its marginal cost to c’ < c; a new equilibrium takes place. (a) What impact does the innovation have on the values of H and L? (b) What impact does the innovation have on consumer welfare? L： Lerner index H: herfil index
The price elasticity of demand for the output of a profit-maximizing firm is E = −2....
The price elasticity of demand for the output of a profit-maximizing firm is E = −2. This firm will mark up the price of its product above marginal cost by __________ percent. 100 150 None of the options. 50 25
The price elasticity of demand for the output of a profit-maximizing firm is E = −4....
The price elasticity of demand for the output of a profit-maximizing firm is E = −4. This firm will mark up the price of its product above marginal cost by __________ percent. 25 150 50 100 None of the options.
A homogeneous good industry is composed of 3 firms. You are given the following information on...
A homogeneous good industry is composed of 3 firms. You are given the following information on output, price and marginal cost of each firm: q, 200 q2-500 93100 p- 50 41.7 c2 29.2 c3 45.8 Remember that for each firm where α, is the market share of firm i and η is the price elasticity of demand. a)Calculate the 2-firm concentration ratio. b)Calculate the Herfindahl index c) Calculate the number equivalent. d) Calculate the Lerner index of ach firm. e...
14. Suppose the price elasticity of demand is -1.3 for Good A and -2.1 for Good...
14. Suppose the price elasticity of demand is -1.3 for Good A and -2.1 for Good B. Which of the following is consistent with these demand elasticities? a. Good A: Grapes Good B: Fruit b. Good A: Milk over the next year Good B: Milk over the next month c. Good A: Diamond necklaces Good B: Beds d. Good A: Train tickets prior to the invention of automobiles Good B: Train tickets following the invention of automobiles 15. A slightly...
YULDTIUNT If the own-price elasticity of demand for your firm's good is -1.5, and if your price is currently set at the level that makes your customers' quantity demanded equal to the quantity you are producing, then you can increase your total revenue flow by: decreasing your output level but keeping your price at its current level. none of the other answers. decreasing your output level and increasing your price. increasing your output level and decreasing your price.
A homogeneous good industry is composed of 3 firms. You are given the following information on output, price and marginal cost of each firm: q, 200 q2-500 93100 p- 50 41.7 c2 29.2 c3 45.8 Remember that for each firm where α, is the market share of firm i and η is the price elasticity of demand. a)Calculate the 2-firm concentration ratio. b)Calculate the Herfindahl index c) Calculate the number equivalent. d) Calculate the Lerner index of ach firm. e...
14. Suppose the price elasticity of demand is -1.3 for Good A and -2.1 for Good B. Which of the following is consistent with these demand elasticities? a. Good A: Grapes Good B: Fruit b. Good A: Milk over the next year Good B: Milk over the next month c. Good A: Diamond necklaces Good B: Beds d. Good A: Train tickets prior to the invention of automobiles Good B: Train tickets following the invention of automobiles 15. A slightly...
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