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Homework answers / question archive / The HHI = 2000 for industry XYZ
The HHI = 2000 for industry XYZ. Which of the below cannot be true for industry XYZ? There are 4 firms, each with 25% market share. CR4 = 80 CR4 = 60 There are 5 firms, each with 20% market share. CR4 = 50 In a market with a large number of small firms, the price elasticity of the residual demand (the demand curve facing the individual firm) = the price elasticity of the market demand multiplied by the number of firms, under the assumption that all firms have approximately the same market share. This means that even if the market demand is not price elastic, the individual firm would face so that_ O a not very elastic residual demand, its ability to profitably raise its price will be very limited O a very elastic residual demand, its ability to profitably raise its price will be very limited an inelastic residual demand, its ability to profitably raise its price will unlimited O an inelastic residual demand, its ability to profitably raise its price will very limited O a very elastic residual demand, its ability to profitably raise its price will be almost unlimited A monopolist sells 12,000 units of output. The price it charges is $12 per unit. Its marginal cost is $9 and constant, its average total cost at 12,000 units is $10. Which of the below is true? The firm is not profitable because of productive inefficiencies and high rent seeking costs, therefore it should shut down. The firm is not profitable but if it increases output, it will help to reduce the firm's losses. The firm is profitable but it should increase output, which will result in lower averages costs and thus even higher profits. The firm is profitable so it should not change its current output level of 14,000 units. The firm is profitable but there is not enough information to say if profits can be increased even more.
