If there were four firms in an industry each with a 25% market share, what would the Herfindahl-Hirschman Index equal?
a. 2500
b. 1250
c. 1,000
d. 625
a
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Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for laptop computers. Which panel best describes what happens in this market when the price of computer hard drives falls?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
The Aluminum Company of America (Alcoa) had a monopoly until the 1940s because
A) it had control of almost all the available supply of bauxite. B) it had a patent on the manufacture of aluminum. C) it was a public enterprise. D) the company had a secret technique for making aluminum from bauxite.
In some industries, like insurance, both small and very large firms coexist and compete quite effectively in the market. This indicates that the long-run average total cost curve in these industries
a. is "U" shaped. b. is downward sloping over all levels of output. c. exhibits constant returns to scale over a wide range of output. d. exhibits diseconomies of scale beginning at a low rate of output.
Asymmetric information is a situation in which
A. information possessed by one party in a transaction is not known by another party. B. private firms have information that they choose to pass along to the government. C. the government has information that it chooses to pass along to private firms. D. information possessed by one party in a transaction is also known by another party.