28The Herfindahl-Hirschman Index is a measure of market power that focuses on: t

Question

28The Herfindahl-Hirschman Index is a measure of market power that focuses on: the ratio of the price of a firm's product to the price elasticity of demand for the product. the share of the market controlled by the X largest firms in the market. the sum of the squares of the market share of each firm in an industry. the difference between a firm's product price and its marginal costs of production. 29The Lerner Index is a measure of market power that focuses on: the ratio of the price of a firm's product to the price elasticity of demand for the product. the share of the market controlled by the X largest firms in the market. the sum of the squares of the market share of each firm in an industry. the difference between a firm's product price and its marginal costs of production, in comparison to the firm's product price. 30Which of the following values of the Lerner Index indicates the greatest amount of market power? 0.365 0.414 0.725 0.625

Explanation / Answer

28) Solution: the sum of the squares of the market share of each firm in an industry.

Explanation: The Herfindahl-Hirschman Index is computed by considering the market share of each firm in the industry, squaring it and afterwards summing the resulting numbers

29) Solution: the difference between a firm's product price and its marginal costs of production, in comparison to the firm's product price.

Explanation: The Lerner index computes the level of market power of a firm by relating price to marginal cost of production

30) Solution: 0.725

Explanation: Lerner index value cannot exceed i; and ranges from a 0 to 1.

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.