If the four firms in an industry represented 40%, 30%, 20%, and 10% of the market, respectively, what would be the Herfindahl-Hirschman Index for this industry? What if the largest firm then divested into two equal sized companies?

a. 3,000 . 2,300.
b. 2,300; 3,000
c. 3,000 . 5,400
d. 2,300; 5,400


a

Economics

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Economists need to develop abstractions in order to: a. avoid analyzing real-world economic interactions, which are too complicated to understand. b. distinguish normative economic behavior from positive economic behavior

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Refer to Figure 13-18. Which of the following statements is true?

A) Da represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the long-run demand curve in an increasing-cost industry.
B) Da represents the long-run supply curve in a perfectly competitive, constant-cost industry while Db depicts the long-run demand curve facing a monopolistic competitor in a decreasing-cost industry.
C) Da represents the long-run demand curve facing a perfect competitor while Db depicts the long-run demand curve facing a monopolistic competitor.
D) Da represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the demand curve in the short run.

Economics