Industry A has four firms that each control 25 percent of the market. Industry B has six firms, where one firm controls 50 percent of the market and the other five firms control 10 percent of the market each. According to the HHI, which industry is more concentrated?
A. Industry A
B. Industry B
C. Both industries are equally concentrated.
D. indeterminate from the given information.
Answer: B
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Martin is in the market for a new television set. He is deciding between two sets: one is rather expensive but offers a guarantee; the other has a lower price but offers no guarantee. Martin's decision to buy the expensive set would indicate that:
a. Martin does not know a good deal when he sees it. b. Martin interpreted the guarantee as a signal of quality. c. Martin did not shop around to get a better deal. d. Martin is not maximizing his utility. e. Martin has a high income.
When colluding oligopolists meet and formally agree on mutually beneficial strategies this is called
a. implicit exclusion b. beneficial inclusion c. reciprocal inclusion d. implicit exclusionary pricing e. explicit collusion
In the long run, a monopolistically competitive firm produces at minimum average cost
a. True b. False Indicate whether the statement is true or false
If the demand for letters written by Abraham Lincoln is higher than the demand for letters written by John Wilkes Booth, what would have to be true for the market equilibrium prices for these letters to be equal?
A) The supply of Lincoln letters would have to be less than the supply of Booth letters. B) The supply of Booth letters would have to be less than the supply of Lincoln letters. C) The supply of Lincoln letters and the supply of Booth letters would have to be equal. D) If the demand for Lincoln letters is greater than the demand for Booth letters, the market equilibrium price for Lincoln letters will always be greater than the market equilibrium price for Booth letters.