Question 1

The Dansby-Willig Index measures market

Accepted Answer

A) structure. 
B) performance. 
C) conduct. 
D) behavior. 
A) structure. 
B) performance. 
C) conduct. 
D) behavior.

Question 2

Zelda Manufacturing has a rather unique product that sells for $15 per unit, and the marginal cost is $7.50.Determine the Lerner index for Zelda Manufacturing.Does this index indicate market power?

Accepted Answer

The Lerner index is (P - MC)/P

Question 3

An industry is comprised of ten (10) firms, each with an equal market share.What is the 4-firm concentration ratio of this industry?

Accepted Answer

A) 0.2. 
B) 0.4. 
C) 0.6. 
D) 0.8. 
A) 0.2. 
B) 0.4. 
C) 0.6. 
D) 0.8.

Question 4

In perfect competition, which is not true?

Accepted Answer

A) Every firm has a small but perceivable market power. 
B) There are a large number of firms. 
C) Firms are price-takers. 
D) Firms produce homogenous goods. 
A) Every firm has a small but perceivable market power. 
B) There are a large number of firms. 
C) Firms are price-takers. 
D) Firms produce homogenous goods.

Question 5

Suppose each of the 50 states had only one gasoline station -- each of the same size.The four-firm concentration ratio a consumer experiences is:

Accepted Answer

A) 1.0. 
B) 0.08. 
C) 0.32. 
D) 0.16. 
A) 1.0. 
B) 0.08. 
C) 0.32. 
D) 0.16.

Question 6

According to the "feedback critique"

Accepted Answer

A) the conduct of firms in an industry may affect the firm's performance. 
B) the conduct of firms in an industry may affect the market structure. 
C) market structure may affect the firm's conduct. 
D) all of the statements associated with this question are correct. 
A) the conduct of firms in an industry may affect the firm's performance. 
B) the conduct of firms in an industry may affect the market structure. 
C) market structure may affect the firm's conduct. 
D) all of the statements associated with this question are correct.

Question 7

Suppose that there are two industries, A and B.There are five firms in industry A with sales at $5 million, $2 million, $1 million, $1 million, and $1 million, respectively.There are 4-firms in industry B with equal sales of $2.5 million for each firm.The HHI for industry A is

Accepted Answer

A) 3,200. 
B) 2,800. 
C) 1,800. 
D) 2,500. 
A) 3,200. 
B) 2,800. 
C) 1,800. 
D) 2,500.

Question 8

Which of the following measures market structure?

Accepted Answer

A) Four-firm concentration ratio. 
B) Lerner Index. 
C) Herfindahl-Hirschman Index. 
D) All of the choices may be used to make inferences about market structure. 
A) Four-firm concentration ratio. 
B) Lerner Index. 
C) Herfindahl-Hirschman Index. 
D) All of the choices may be used to make inferences about market structure.

Question 9

A firm has a Lerner index of 0.75, and charges a price of $150.The firm's marginal cost is:

Accepted Answer

A) $0. 
B) $37.50. 
C) $112.50. 
D) There is not sufficient information to determine the firm's marginal cost. 
A) $0. 
B) $37.50. 
C) $112.50. 
D) There is not sufficient information to determine the firm's marginal cost.

Question 10

The industry elasticity of demand for gadgets is -2, while the elasticity of demand for an individual gadget manufacturer's product is -10.Based on the Rothschild approach to measuring market power, we conclude that

Accepted Answer

A) the Herfindahl index for this industry is 5. 
B) the Herfindahl index for this industry is 0.2. 
C) there is no monopoly power in this industry. 
D) there is significant monopoly power in this industry. 
A) the Herfindahl index for this industry is 5. 
B) the Herfindahl index for this industry is 0.2. 
C) there is no monopoly power in this industry. 
D) there is significant monopoly power in this industry.

Question 11

In Tuna, Texas, the retail gasoline market consists of six firms.Firm 1 has 35 percent of the market, Firm 2 has 25 percent, and the remaining firms have 10 percent each.What is the four-firm concentration ratio for this industry?

Accepted Answer

Four-firm

Question 12

Suppose the market for good X has a four-firm concentration ratio of 0.50.Furthermore, assume that total sales in the industry are $1.2 million.Based on this information we know that sales for the largest four firms in the industry equals (in aggregate)

Accepted Answer

A) $600,000. 
B) $60,000. 
C) $2,400,000. 
D) $240,000. 
A) $600,000. 
B) $60,000. 
C) $2,400,000. 
D) $240,000.

Question 13

Firms like McDonald's and Wendy's sell hamburgers, salads, and other products that are differentiated in nature.While numerous fast-food restaurants exist in most locations, the differentiated nature of the firms' products permits them to charge prices that are in excess of marginal cost.Given these observations, is the fast-food industry most likely a perfectly competitive industry, a monopoly, monopolistically competitive, or an oligopoly? Use the causal view of structure, conduct, and performance to explain the roles of product differentiation in the industry, and explain how the feedback critique applies in this context.

Accepted Answer

Monopolistically competitive.In a monopo

Question 14

A Lerner index of 0 suggests

Accepted Answer

A) monopoly. 
B) monopolistic competition. 
C) oligopoly. 
D) perfect competition. 
A) monopoly. 
B) monopolistic competition. 
C) oligopoly. 
D) perfect competition.

Question 15

A firm has a marginal cost of $200 and charges a price of $500.The Lerner index for this firm is:

Accepted Answer

A) 0.20. 
B) 0.50. 
C) 1.50. 
D) 0.60. 
A) 0.20. 
B) 0.50. 
C) 1.50. 
D) 0.60.

Question 16

Which of the following is used to measure market structure and performance?

Accepted Answer

A) Four-firm concentration ratio. 
B) HHI (Herfindahl-Hirschman Index). 
C) Dansby-Willig Performance Index. 
D) All of the statements associated with this question are correct. 
A) Four-firm concentration ratio. 
B) HHI (Herfindahl-Hirschman Index). 
C) Dansby-Willig Performance Index. 
D) All of the statements associated with this question are correct.

Question 17

A firm's average cost is $20 and it charges a price of $20.The Lerner index for this firm is:

Accepted Answer

A) 0.20. 
B) 0.50. 
C) 0.33. 
D) insufficient information. 
A) 0.20. 
B) 0.50. 
C) 0.33. 
D) insufficient information.

Question 18

Which of the following industry structures would you expect to have the lowest Lerner index score?

Accepted Answer

A) Perfect competition. 
B) Monopoly. 
C) Monopolistic competition. 
D) Oligopoly. 
A) Perfect competition. 
B) Monopoly. 
C) Monopolistic competition. 
D) Oligopoly.

Question 19

Conglomerate integration

Accepted Answer

A) reduces transaction costs of acquiring inputs. 
B) improves cash flow by exploiting the cyclical nature of different product lines. 
C) exploits economies of scope by merging the production of similar products. 
D) all of the statements associated with this question are correct. 
A) reduces transaction costs of acquiring inputs. 
B) improves cash flow by exploiting the cyclical nature of different product lines. 
C) exploits economies of scope by merging the production of similar products. 
D) all of the statements associated with this question are correct.

Question 20

An industry consists of four firms with annual sales of $300, $500, $400, and $600, respectively.What is the industry's HHI?

Accepted Answer

A) 1,659. 
B) 2,654 
C) 10,000. 
D) There is not sufficient information to compute the industry HHI. 
A) 1,659. 
B) 2,654 
C) 10,000. 
D) There is not sufficient information to compute the industry HHI.

The Dansby-Willig Index measures market

Zelda Manufacturing has a rather unique product that sells for $15 per unit, and the marginal cost is $7.50.Determine the Lerner index for Zelda Manufacturing.Does this index indicate market power?

An industry is comprised of ten (10) firms, each with an equal market share.What is the 4-firm concentration ratio of this industry?

In perfect competition, which is not true?

Suppose each of the 50 states had only one gasoline station -- each of the same size.The four-firm concentration ratio a consumer experiences is:

According to the "feedback critique"

Suppose that there are two industries, A and B.There are five firms in industry A with sales at $5 million, $2 million, $1 million, $1 million, and $1 million, respectively.There are 4-firms in industry B with equal sales of $2.5 million for each firm.The HHI for industry A is

Which of the following measures market structure?

A firm has a Lerner index of 0.75, and charges a price of $150.The firm's marginal cost is:

The industry elasticity of demand for gadgets is -2, while the elasticity of demand for an individual gadget manufacturer's product is -10.Based on the Rothschild approach to measuring market power, we conclude that

In Tuna, Texas, the retail gasoline market consists of six firms.Firm 1 has 35 percent of the market, Firm 2 has 25 percent, and the remaining firms have 10 percent each.What is the four-firm concentration ratio for this industry?

Suppose the market for good X has a four-firm concentration ratio of 0.50.Furthermore, assume that total sales in the industry are $1.2 million.Based on this information we know that sales for the largest four firms in the industry equals (in aggregate)

A Lerner index of 0 suggests

A firm has a marginal cost of $200 and charges a price of $500.The Lerner index for this firm is:

Which of the following is used to measure market structure and performance?

A firm's average cost is $20 and it charges a price of $20.The Lerner index for this firm is:

Which of the following industry structures would you expect to have the lowest Lerner index score?

Conglomerate integration

An industry consists of four firms with annual sales of $300, $500, $400, and $600, respectively.What is the industry's HHI?

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

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Exam 7: The Nature of Industry

The Dansby-Willig Index measures market

Zelda Manufacturing has a rather unique product that sells for $15 per unit, and the marginal cost is $7.50.Determine the Lerner index for Zelda Manufacturing.Does this index indicate market power?

An industry is comprised of ten (10) firms, each with an equal market share.What is the 4-firm concentration ratio of this industry?

In perfect competition, which is not true?

Suppose each of the 50 states had only one gasoline station -- each of the same size.The four-firm concentration ratio a consumer experiences is:

According to the "feedback critique"

Suppose that there are two industries, A and B.There are five firms in industry A with sales at $5 million, $2 million, $1 million, $1 million, and $1 million, respectively.There are 4-firms in industry B with equal sales of $2.5 million for each firm.The HHI for industry A is

Which of the following measures market structure?

A firm has a Lerner index of 0.75, and charges a price of $150.The firm's marginal cost is:

The industry elasticity of demand for gadgets is -2, while the elasticity of demand for an individual gadget manufacturer's product is -10.Based on the Rothschild approach to measuring market power, we conclude that

In Tuna, Texas, the retail gasoline market consists of six firms.Firm 1 has 35 percent of the market, Firm 2 has 25 percent, and the remaining firms have 10 percent each.What is the four-firm concentration ratio for this industry?

Suppose the market for good X has a four-firm concentration ratio of 0.50.Furthermore, assume that total sales in the industry are $1.2 million.Based on this information we know that sales for the largest four firms in the industry equals (in aggregate)

A Lerner index of 0 suggests

A firm has a marginal cost of $200 and charges a price of $500.The Lerner index for this firm is:

Which of the following is used to measure market structure and performance?

A firm's average cost is $20 and it charges a price of $20.The Lerner index for this firm is:

Which of the following industry structures would you expect to have the lowest Lerner index score?

Conglomerate integration

An industry consists of four firms with annual sales of $300, $500, $400, and $600, respectively.What is the industry's HHI?

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters