The Average PCM (Percentage Contribution Margin)in a Cournot Equilibrium Is

question 1

Multiple Choice

The average PCM (percentage contribution margin) in a Cournot equilibrium is given by the formula PCM=H/η,where H is the Herfindahl index and η is the price elasticity of market demand.Given this equation,which of the following statements is true?

• A)The more concentrated the industry,the smaller the PCMs in equilibrium
• B)The industry concentration only raises the PCMs in equilibrium
• C)The industry concentration has no bearing on PCM size in equilibrium
• D)The less concentrated the industry,the larger the PCMs in equilibrium
• E)The less concentrated the industry,the smaller the PCMs in equilibrium

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Definitions:

Organic Reactions

Chemical reactions involving organic compounds, which are mainly composed of carbon atoms along with hydrogen, oxygen, nitrogen, and other elements.

Solvent

A substance capable of dissolving other substances (solutes) to form a solution, often used in chemical processes and industries.

Acetylene

The simplest alkyne, a hydrocarbon with carbon-carbon triple bonds, used as a fuel and a building block in chemical synthesis.

Ethene

A colorless flammable gas (C2H4), the simplest alkene, acting as a fundamental building block in the petrochemical industry.