An industry is made up of 8 firms with the following percent market shares: 29, 20, 11, 10, 9, 8, 7, 6. The firms with 8 and 7 percent market share are proposing to merge. What is the new Herfindahl-Hirschman index if the merger takes place?
A) 225
B) 1462
C) 1692
D) 1804
D
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The decision to undertake product development in monopolistic competition is made by comparing the
A) marginal benefit of product development to the marginal cost of product development. B) average revenue of product development to the average total cost of product development. C) total revenue of product development to the total cost of product development. D) firm's expenditure on product development to expenditures by competing firms.
Incrementalism describes the notion that _____
a. an agency's budget increases a small amount each year b. only one or two new programs are added to the budget every year c. government employees should only receive a cost-of-living adjustment annually d. government is slow to act because it is politically difficult to do so
In a competitive market, if buyers did not know all the prices charged by the many firms,
A) all firms still face horizontal demand curves. B) firms sell a differentiated product. C) demand curves can be downward sloping for some or all firms. D) the number of firms will most likely decrease.
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.