1. Which market structure(s) will have zero economic profits in the long run?2. Which market structure(s) will be a price maker and have barriers to entry?3. There are currently 8 firms in a particular market. There firm sales are given in the table below. (1)What is the four-firm concentration ratio for this industry? (2) Would you classify it as an oligopoly?Firm12345678Sales$1,000$1,500$2,000$2,500$3,000$1,000$500$2,5004. Although market structures vary widely in their characteristics, (1) what is one common aspect amongall of them? (2) What is the potential calculation for your previous answer (Answers in 4.1)?5. In the long run, (1) which market structures are likely to have their average cost curve just sit on top oftheir demand curve? (2) What does this imply for each market structure? (3) Are there any differences inthe market structures you gave in your previous answer?6. What market structure(s) are likely to cause a net loss to societal welfare?

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1. Which market structure(s) will have zero economic profits in the long run?

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter24: Monopolistic Competition, Oligopoly, And Game Theory

Section: Chapter Questions

Problem 9QP

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Question

1. Which market structure(s) will have zero economic profits in the long run?
2. Which market structure(s) will be a price maker and have barriers to entry?
3. There are currently 8 firms in a particular market. There firm sales are given in the table below. (1)
What is the four-firm concentration ratio for this industry? (2) Would you classify it as an oligopoly?
Firm
1
2
3
4
5
6
7
8
Sales
$1,000
$1,500
$2,000
$2,500
$3,000
$1,000
$500
$2,500
4. Although market structures vary widely in their characteristics, (1) what is one common aspect among
all of them? (2) What is the potential calculation for your previous answer (Answers in 4.1)?
5. In the long run, (1) which market structures are likely to have their average cost curve just sit on top of
their demand curve? (2) What does this imply for each market structure? (3) Are there any differences in
the market structures you gave in your previous answer?
6. What market structure(s) are likely to cause a net loss to societal welfare?

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Once more, please consider a market with eight producers that produce a total of 30,000 units. Their output is broken down below: Firm's Firm Output One 7400 Two 1800 Three 4100 Four 5200 Five 1400 Six 2800 Seven 6600 Eight 700 According to our lecture, this industry likely to be an oligopoly because is not; a small number of firms produce a large amount of the output O is; a small number of firms produce a large amount of the output O is not; production is spread out among relatively many firms is; production is spread out among relatively many firms
oligopoli 5.1 The following table represents the market share percent- age for each firm in a hypothetical industry. Firm Market Share A 15 C D E 20 B 6 12 7 H 19 11 F G 10 a. Calculate the four-firm concentration ratio for this industry. b. Calculate the Herfindahl-Hirschman Index (HHI) for this industry. c. Would the Justice Department consider this industry as unconcentrated, moderately concentrated, or concen- trated? Why?
(a) There are two companies in the world that produce large passenger aircraft, Boeing, and Airbus. How would you characterize the market for large passenger aircraft, monopoly, perfectly competitive, monopolistically competitive or Oligopoly? Please explain. Large passenger aircraft are defined as aircraft than can carry more than 150 passengers. (b) The market for telephone services has become more competitive over time with the advancement of technology in the industry. Technology in the aircraft manufacturing industry has also advanced significantly. Why hasn’t this improvement in technology led to an increase in competition (Boeing and Airbus have been the only manufacturers in this industry for many years)? Please explain.
16 When does a kinked demand curve occur? When one firm in a duopoly cuts prices and forces the exit of the other firm BO When competing oligopoly firms agree to increase prices at the same time and rate CO When competing oligopoly firms commit to match price cuts but not price increases DO When a natural monopoly raises its prices and provides an opportunity for market entry
1. What is the Nash equilibrium in the price competition homogeneous-product oligopoly? 2. Why do the firms charge the same price in equilibrium?