Chap_7_Solutions_Odd

Chap_7_Solutions_Odd - Chapter 7: Answers to Questions and...

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Chapter 7: Answers to Questions and Problems 1. The four-firm concentration ratio is, 4 $175,000 $150,000 $125,000 $100,000 0.55 $1,000,000 C + + + = = . 2. 3. The elasticity of demand for a representative firm in the industry is –1.5, since 0.9 0.9 0.6 1.5 0.6 f f E E - - = = = - . 4. 5. Managers should not specialize in learning to manage a particular type of market structure. Market structure generally evolves over time, and managers must adapt to these changes. 6. 7. As shown in the text, the HHI is 2 2 2 2 2 2 1 1 2 1 10,000 10,000 ... ... n i i i n i T T T T T T S S S S S S S S S S S S + = = + + + + + + . (1) When any two of these firms merge, the HHI becomes + + + + + + + 2
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Chap_7_Solutions_Odd - Chapter 7: Answers to Questions and...

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