Exam 7: The Nature of Industry

The ranking of industries by the four-firm concentration ratio usually,but not always,reveals the same pattern as ranking by HHI.When a discrepancy is found it is usually due to the following:

An industry consists of six firms with annual sales of $300,$500,$400,$700,$600,and $600.According to the general rule of thumb,the HHI of this industry implies that the market structure is:

The Lerner index in the paper industry is 0.58.Based on this information,a firm charging $3.25 per ream of paper should have a marginal cost of:

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

Suppose each of the 50 states had only one gasoline station,and all stations were the same size.The four-firm concentration ratio a consumer would experience is:

Suppose that the demand in a particular industry is given by Q^d = 100 - 2P.When the market price in the industry is $10 per unit,total demand in the industry is __ __.Furthermore,assume that each of the four largest firms in the industry sell 15 units.Based on this information,the four-firm concentration ratio is ____ .

The causal view of an industry is that:

In perfect competition,which is NOT true?

According to the U.S.Department of Justice Merger Guidelines,a Herfindahl-Hirschman index (HHI)above _________ is associated with a highly concentrated industry.Therefore,if the automobile industry had an HHI of 2,200,then a vertical merger between GM and one of its suppliers likely would be:

In the 1960s,each firm in the computer industry was able to make extremely large profit margins,some as high as 50 to 60 percent.The margin decreased to 20 to 40 percent in the 1970s and to 10to 20 percent in the 1980s.We conclude that:

Suppose each of the 50 states had only one gasoline station,and all stations were the same size.The four-firm concentration ratio for the state of New York,based on the state data,is:

Suppose each of the 50 states had only one gasoline station,and all stations were the same size.The four-firm concentration ratio,based on national data,would be:

Alpha Industries operates in a highly competitive market.While there are few other firms in the industry due to the high fixed costs of building plants,rival firms are very aggressive in their pricing strategies.Of the products sold in the industry,over 80 percent have 10 years of patent protection remaining.Does this industry meet an economist's definition of a perfectly competitive industry?

There are five firms in an industry.You know sales of the four largest firms are $800,000,$700,000,$440,000,and $230,000.If the C₄ ratio is 80 percent,then the HHI is:

An industry consists of eight firms with annual sales (in millions)of $200,$300,$900,$600,$300,$700,$500,and $600.What is the industry's C₄?

Conglomerate integration:

The tobacco industry has a Lerner index of 0.76.Based on this information,compute the optimal markup factor.

Oligopoly differs from monopoly as follows:

Producer and consumer surpluses are measures of:

Which of the following is NOT one class of a market structure?