Consider a Market Characterized by Two Firms That Set the Same

question 28

Multiple Choice

Consider a market characterized by two firms that set the same price in the market,P = $10.Total market demand is Q_T = 100 − 2P,of which the two firms share equally.Based on this information,we can conclude:

• A) the HHI = 5,000 and the Rothschild index is 1.
• B) the HHI = 2,500 and the Rothschild index is 2.
• C) the HHI = 5,000 and the Rothschild index is 2.
• D) None of the answers are correct.

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Definitions:

Income Ratios

Financial metrics that compare various aspects of a company’s income to its sales, assets, or equity, to assess financial performance.

Capital Account

An account on a nation's balance of payments that records transactions involving the purchase and sale of assets, or in business accounting, an account representing owner's equity.

Partnership Capital

The total amount of equity contributed by all partners in a partnership business.

Personal Assets

Assets owned by an individual, including tangible and intangible items of value such as real estate, investments, and personal property.