-The Herfindahl-Hirschman Index Is Used as a Guideline to Determine

question 150

Essay

-The Herfindahl-Hirschman Index is used as a guideline to determine if a market is competitive or concentrated. Calculate the index value for each market described below.
a) 100 firms, each of which produces 1 per cent of market output
b) 50 firms, each of which produces 2 per cent of market output
c) 25 firms, each of which produces 4 per cent of market output
d) 20 firms, each of which produces 5 per cent of market output
e) 10 firms, each of which produces 10 per cent of market output
f) 5 firms, each of which produces 20 per cent of market output
g) 2 firms, each of which produces 50 per cent of market output

Understand the legal considerations for businesses operating in foreign markets.

Understand the application and limitations of international treaties and agreements such as NAFTA and GATT.

Identify the types of legal barriers to international trade, including tariffs and nontariff barriers.

Recognize the role and procedures of international organizations in dispute resolution.

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Definitions:

Capacity

The maximum amount of something that a facility or system can contain or produce.

Principal-Agent Problems

A situation in economics where one party (the agent) is expected to act in the best interest of another party (the principal) but may have the incentive to act in their own interest instead.

Agent

Individual employed by a principal to achieve the principal’s objective.

Principal

Individual who employs one or more agents to achieve an objective.