1). Suppose the demand curve for a monopolist is Qd = 500 - P, and the marginal revenue function is MR = 500 - 2Q. The monopolist has a constant marginal and average total cost of $50 per unit.
a). Find the monopolist's profit-maximizing output and price.

b). Calculate the monopolist's profit.

c). What is the Lerner index for this industry?

2). The top four firms in Industry A have market shares of 30, 25, 10, and 5 percent, respectively. The top four firms in Industry B have market share of 15, 12, 8, and 4 percent, respectively. Calculate the four-firm concentration ratios for the two industries. Which industry is more concentrated?

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Solution:
1) Suppose the demand curve for a monopolist is Qd = 500 - P, and the marginal revenue function is MR = 500 - 2Q. The monopolist has a constant marginal and average total cost of $50 per unit.

a). Find the monopolist's profit-maximizing output and price.
To maximize profits, a monopolist sets his output in such a way that
Marginal Revenue = ...

Solution Summary

There are two problems. Solution to first problem describes the steps for finding profit maximizing output, price and maximum profit. It also calculates Lerner Index for the industry. Solution to second problem calculates four firm concentration ratios for two industries.

The pizza market is divided as follows:
Pizza hut 20.7%
Domino's 17.0
Little Caesar's 6.7
Pizza Inn 2.2
Round Table 2.0
All others 51.4
a. How would you describe its market structure?
b. What is the approximate Herfindahl index?
c. What is the four-firmconcentrationratio?

Ten firms complete in a market to sell product X. The total sales of all firms selling the product are $1 million. ranking the firms' sales from highest to lowest, we find the top fourfirms' sales to be $175,000, $150,000, $125,000, and $100,000, respectively. Calculate the four-firmconcentrationratio in the market for produc

1.
An industry consists of three firms with sales of $300,000, $700,000 and $250,000.
a. Calculate the Herfindahl-Hirschman index (HHI). SHOW ALL WORK
b. Calculate the four-firmconcentrationratio (C4). SHOW ALL WORK
c. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, do you think the Department

There are six firms in the industry. Suppose their sales in the year 2006 are as
follows:
Firm Sales (10 millions of dollars)
A 100
B 80
C 50
D 40
E 40
F 20
1. What is the concentrationratio in th

The four-firmconcentrationratio
a. indicates the total profitability among the top fourfirms in an industry.
b. is an indicator of the degree of monopolistic competition.
c. indicates the presence and intensity of an oligopoly market.
d. is used by the government as a basis for anti-trust cases.

Please assist and show steps.
An industry consists of 5 firms, with sales of $100,000, $500,000, $400,000, $300,000, and $200,000. Now, suppose the largest and smallest firms merge.
-Calculate the four-firmconcentrationratio (C4) before the merger.
-Calculate the Herfindahl-Hirschman index (HHI) before the merger.
-C

1. Industry structure is often measured by computing the Four-FirmConcentrationRatio. Suppose you have an industry with 20 firms and the CR is 30%. How would you describe this industry? Suppose the demand for the product rises and pushes up the price for the good. What long-run adjustments would you expect following this chang

What are the advantages of the Herfindahl index over concentrationratios in measuring the degrees of concentration in an industry? (b) What is the disadvantage of both?

For the graph below:
a. Does q0 represent the profit maximizing level of output? Yes or No. Explain.
b. Is the firm making a profit or realizing losses? How do you know?
c. Should the firm continue to operate in the short run? Explain
2. The top fourfirms in industry A have market shares of 30, 25, 10 and 5% res