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Carrot Computers and its competitors purchase touch screens for their handheld computers from several suppliers. The six makers of touch screens have market shares of, respectively, 20 percent, 17 percent, 12 percent, 18 percent, 21 percent, and 12 percent. a. What is the Herfindahl index for the touch screen manufacturing industry?. b. By how much would a proposed merger between the two smallest touch screen makers increase the Herfindahl index? . Would the government be likely to challenge that proposed merger? Yes No. c. If Carrot Computers horizontally merges with its competitor Blueberry Handhelds, by how much would the Herfindahl index change for the touch screen industry?
Explain the solution to the firm's cost-minimization difficulty ever occur off the iso-quant representing the required level of output.
A firm sells its product in a perfectly competitive market where other firms charge a price of $110 per unit. The firm’s total costs are C(Q) = 50 + 10Q + 2Q2. How much output should the firm produce in the short run? What price should the firm char..
You are a newspaper publisher. You are in the middle of a one-year rental contract for your factory that requires you to pay $500,000 per month, and you have contractual labor obligations of $1 million per month that you can’t get out of. You also ha..
Use the Mundell-Fleming model to try to understand the basis for this criticism and show a possible policy that Germany might pursue that could have a beneficial impact on another member country of the euro zone. how do the equation(s) of the model (..
Economists assume that consumers attempt to maximize their utility based upon their preferences, income and price of commodities. Do you see any weakness of the above are you aware of any example of irrational behavior by consumers (or yourself)?
Budweiser (now owned by a Belgium based beer company called In Bev), Miller and Coors who together produce 85% of all beer consumed in the US, each spend well over$250 million a year on television advertising campaigns, promoting their beer brands. D..
Mr. Ess, the owner of the SS Skimpy and an American citizen, borrows money from MultiBank in London to outfit his ship, giving the bank a maritime lien. Mr. Ess sells the Skimpy to Mr. Tee, a Canadian. Mr. Tee is unaware of the lien and unaware that ..
In the medical care sector, the decisions of what services should be produced, how they should be produced, how they should be distributed, and how to allow for growth and innovation must be made. What specific health care resources should be used to..
When networks are important the “best” products usually win. Network goods are usually sold by monopolies or oligopolies. Standard wars are common in establishing network goods.
Suppose than an oligopolist is charging $21 per unit of output and selling 31 units each day. Also suppose that previously it had lowered its price from $21 to $19, rivals matched the price cut, and the firm’s sales increased from 31 to 32 units. Wha..
For the Pittsburgh Development Corporation problem in Section 4.3, the decision alternative to build the large condominium complex was found to be optimal using the expected value approach. In Section 4.4 we conducted a sensitivity analysis for the p..
Joe and Mary can each produce salads and smoothies. He can make 6 smoothies per hour or 30 salads per hour. She can make 30 smoothies per hour or 30 salads per hour. Make a graph with salads per hour on the vertical axis and smoothies per hour on the..
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