The Industry Elasticity of Demand for Gadgets Is −2,while the Elasticity

question 11

Multiple Choice

The industry elasticity of demand for gadgets is −2,while the elasticity of demand for an individual gadget manufacturer's product is −2.Based on the Rothschild approach to measuring market power,we conclude that:

• A) there is little monopoly power in this industry.
• B) there is significant monopoly power in this industry.
• C) the Herfindahl index for this industry is −2.
• D) the Herfindahl index for this industry is 2.

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Definitions:

Wheat

Wheat is a cereal grain, originally from the Levant region of the Near East but now cultivated worldwide, a staple food used to make flour for breads, pasta, and other foods.

Opportunity Cost

The cost of a missed opportunity; the value of the best alternative that one gives up when making a decision.

Frozen Foods

Food products that have been preserved through freezing to extend shelf life and retain nutritional value.

Labor Force

The aggregate sum of individuals working or actively looking for work in an economic system.