Excess capacity is
a. an example of the inefficiencies of monopolistically competitive markets.
b. a short-run problem but not a long-run problem.
c. a characteristic of rising average total cost curves.
d. Both a and b are correct.
a
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Assume the market shares of the six largest firms in an industry are 12 percent each. Calculate the six-firm concentration ratio and Herfindahl-Hirschman index for this industry
What does each of these measures have to say about the degree of concentration in the industry? Explain.
Which of the following provide increased competition for public schools?
a. homeschooling b. charter schools c. vouchers d. all of the above
After the deregulation of the airline industry, the new airlines had a competitive cost advantage over the older ones as:
a. they could practice price discrimination. b. they did not bear any legacy cost. c. they enjoyed economies of scale. d. they had to pay lower fuel surcharge.
A monopolist faces a demand curve given by P = 20 - Q and has total costs given by TC = Q2. By using a bit of calculus, you should be able to determine that the firm's marginal revenue is MR = 20 - 2Q and its marginal cost is MC = 2Q. What is its profit-maximizing output level?
a. 5 b. 6 c. 7 d. 8