-Suppose There Are 7 Firms in the Confectionary Industry with the Market

question 77

Multiple Choice

-Suppose there are 7 firms in the confectionary industry with the market shares shown above. What is the HHI for the industry?

• A) 6,400
• B) 1,850
• C) 20
• D) 2,000
• E) 100

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Definitions:

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogenous product, perfect information, and no barriers to entry or exit.

Marginal Cost

A rise in the comprehensive cost when producing an additional unit of a product or service.

Fixed Cost

A charge that stays the same, no matter how much is produced or sold in terms of goods or services.

Variable Costs

Expenses that vary directly with the level of production or volume of output.