Monday
December 22, 2014

Homework Help: ECON Firm

Posted by CAM on Monday, June 12, 2006 at 4:39pm.

Suppose you have an industry with 20 firms and the CR is 30%. How would you describe this industry?Suppose the demand for product rises and pushes up the price for the good. What long run adjustments would you expect following this change in demand? What des your adjustment process imply about the CR for the industry?
Now consider that the industry has 20 firms but the CR is 80% instead of 30% How would describe this industry? What are some reaons why this industry has a high CR while the other industry had a low CR? Is it possible for smaller firms to thrive and profit in such and industry? How? Contrast the effects on market efficiency if the dominating firms use a price leadership model versus a contestable markets model. Be sure to show your work.


I or others will gladly critique your answer.


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With a concentration ration of 30% which is squared to equal 900. According to the guidelines established by the U.S. Department of Justice in 1992, the market is “unconcentrated”.

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