Monopoly and Monopolistic

Monopoly and Monopolistic Competition

DQ1. There are four firms in an industry with the following

market shares:

Firm 1 30%

Firm 2 25%

Firm 3 25%

Firm 4 20%

a) Calculate the Herfindahl Hirschman Index for the

industry.

b) What is the number of effective competitors in this

market? Show your calculation.

DQ 2. Suppose the demand curve for a monopolist is given as:

Qd = 500- P

MR = 500 – 2Q

The monopolist has a constant marginal and average total

cost of $50 per unit.

a) Determine the monopolist’s profit-maximizing price and

output.

b) Calculate the monopolist’s profit.

c) What is the Lerner Index for the industry?

DQ 3. There are two industries, A and B; and each industry

consists of four firms. However, each of the four firms in industry A has a 25%

market shares while those firms in industry B have 80% 10%, 5% and 5% market

respectively..

a) Calculate the three- and four-firm concentration ratios

for each industry.

b) Calculate the Hirfindahl Hirschman Index for each

industry.

c) Are these industries equally concentrated? Explain your

answer.

Monopoly and Monopolistic

Monopoly and Monopolistic Competition

DQ1. There are four firms in an industry with the following

market shares:

Firm 1 30%

Firm 2 25%

Firm 3 25%

Firm 4 20%

a) Calculate the Herfindahl Hirschman Index for the

industry.

b) What is the number of effective competitors in this

market? Show your calculation.

DQ 2. Suppose the demand curve for a monopolist is given as:

Qd = 500- P

MR = 500 – 2Q

The monopolist has a constant marginal and average total

cost of $50 per unit.

a) Determine the monopolist’s profit-maximizing price and

output.

b) Calculate the monopolist’s profit.

c) What is the Lerner Index for the industry?

DQ 3. There are two industries, A and B; and each industry

consists of four firms. However, each of the four firms in industry A has a 25%

market shares while those firms in industry B have 80% 10%, 5% and 5% market

respectively..

a) Calculate the three- and four-firm concentration ratios

for each industry.

b) Calculate the Hirfindahl Hirschman Index for each

industry.

c) Are these industries equally concentrated? Explain your

answer.

Monopoly and Monopolistic

Monopoly and Monopolistic Competition

DQ1. There are four firms in an industry with the following

market shares:

Firm 1 30%

Firm 2 25%

Firm 3 25%

Firm 4 20%

a) Calculate the Herfindahl Hirschman Index for the

industry.

b) What is the number of effective competitors in this

market? Show your calculation.

DQ 2. Suppose the demand curve for a monopolist is given as:

Qd = 500- P

MR = 500 – 2Q

The monopolist has a constant marginal and average total

cost of $50 per unit.

a) Determine the monopolist’s profit-maximizing price and

output.

b) Calculate the monopolist’s profit.

c) What is the Lerner Index for the industry?

DQ 3. There are two industries, A and B; and each industry

consists of four firms. However, each of the four firms in industry A has a 25%

market shares while those firms in industry B have 80% 10%, 5% and 5% market

respectively..

a) Calculate the three- and four-firm concentration ratios

for each industry.

b) Calculate the Hirfindahl Hirschman Index for each

industry.

c) Are these industries equally concentrated? Explain your

answer.

Monopoly and Monopolistic Competition

DQ1. There are four firms in an industry with the following

market shares:

Firm 1 30%

Firm 2 25%

Firm 3 25%

Firm 4 20%

a) Calculate the Herfindahl Hirschman Index for the

industry.

b) What is the number of effective competitors in this

market? Show your calculation.

DQ 2. Suppose the demand curve for a monopolist is given as:

Qd = 500- P

MR = 500 – 2Q

The monopolist has a constant marginal and average total

cost of $50 per unit.

a) Determine the monopolist’s profit-maximizing price and

output.

b) Calculate the monopolist’s profit.

c) What is the Lerner Index for the industry?

consists of four firms. However, each of the four firms in industry A has a 25%

market shares while those firms in industry B have 80% 10%, 5% and 5% market

respectively..

a) Calculate the three- and four-firm concentration ratios

for each industry.

b) Calculate the Hirfindahl Hirschman Index for each

industry.

c) Are these industries equally concentrated? Explain your

answer.