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1) Ten firms compete in a market to sell product X. The total sales of all firms selling the product are $1 million.

1) Ten firms compete in a market to sell product X. The total sales of all firms selling the product are $1 million. Ranking the firms’ sales from highest to lowest, we find the top four firms’ sales to be $175,500, $150,000, $125,000 and $100,000, respectively. Calculate the four-firm concentration ratio in the market for product X.

2) You are a manager of a firm operating in a perfectly competitive market. Market price is $35 and your total cost curve is C(Q) = 10 + 2Q + .5Q2 .

d) What will happen in the long run?
e) How would your answer change if your cost were C(Q) = 80 + 5Q + 30Q2?
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1) Ten firms compete in a market to sell product X. The total sales of all firms selling the
product are $1 million. Ranking the firms’ sales from highest to lowest, we find the top four
firms’...

Sign up to view the full answer

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