Marriott and Holiday Inn want to merge, but the resulting company would control 44 percent of the market for hotel rooms. They promise the Department of Justice that they will not raise room rates, if they are allowed to merge. Will the Department of Justice allow this merger? Explain using the Herfindahl- Hirschman index
The Department of Justice would allow the merger as long as the resulting Herfindahl-Hirschman index is
below 1,000 . and would challenge any merger with an index number above 1,800 . This merger would
result in an index number greater than 1,936 (since 44 ? 44 = 1,936), and so would not be allowed.
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Which of the following is NOT correct for a perfectly competitive firm in long-run equilibrium?
A) SAC = LAC B) MR = P = AR C) MC = MR > LAC D) LAC = P
Use the following general linear demand relation:Qd = 680 - 9P + 0.006M - 4PRwhere M is income and PR is the price of a related good, R. If M = $15,000 and PR = $20, the demand function is
A. Qd = 680 - 9P. B. P = 690 - 9Qd. C. P = 680 - 9Qd. D. Qd = 690 - 9P. E. Qd = 800 - 19P.
According to the above table, national income is
A. $2,465. B. $2,550. C. $2,190. D. $2,750.
Explain why saving equals planned investment at equilibrium GDP.
What will be an ideal response?