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
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.
