If a firm with a 20 percent market share merges with a firm with 5 percent of the market, by how much will the Herfindahl index change? The other firms have 40 percent, 15 percent, 10 percent, and 10 percent shares
a. It rises by 100.
b. It rises by 200.
c. It falls by 100.
d. It falls by 200.
e. It rises by 25.
B
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According to the new classical view, changes in aggregate demand
a. can temporarily influence output b. affect only the aggregate price level. c. can influence output but at the cost of higher inflation. d. are primarily driven by changes in investment. e. Both a and c
According to Milton Friedman, regular income can be divided into permanent income and transitory income
Indicate whether the statement is true or false
Economists depict distribution of income by drawing a Lorenz curve above the diagonal
Indicate whether the statement is true or false
If the price of gasoline rises by 20 percent and consumption of gasoline falls 5 percent,
a. demand is elastic. b. demand is unit-elastic. c. demand is inelastic. d. elasticity of demand cannot be calculated.