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?
The answer is... View the full answer