Suppose There Are Only Two Firms in an Industry and Their

question 242

Multiple Choice

Suppose there are only two firms in an industry and their products are perfect substitutes for each other.Each firm has 50 percent of the market share,and they have the same marginal cost.The Hirfindahl Hirschman Index (HHI) in this market is ________,and the government should ________.

• A) 5,000; regulate this market because the HHI is rather high
• B) 2,500; not regulate this market because HHI is rather low
• C) 5,000; not regulate this market because the price will become equal to the marginal cost
• D) 2,500, regulate this market because HHI is rather high

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Definitions:

Department Managers

Individuals responsible for overseeing specific departments within an organization, managing staff, and ensuring the achievement of departmental objectives.

Data Entry Clerks

Administrative workers responsible for accurately inputting data into computer systems or databases.

Senior Employees

Workers who have extensive experience and tenure within a company or industry, often holding a higher rank or position due to their longevity and expertise.

Past Experience

Previous events or activities that an individual or organization has gone through, which influence current behavior, decisions, and actions.