MG 640 Managerial Economics Homework Assignment 2015

| November 24, 2016

Homework Assignment

The Nature of Industry

For this week read Chapter 7, pages 245-273

Answer the following questions:

Question 2. On page 269

Calculate the Herfindahl-Hirschman index (HHI). SHOW ALL WORK

Calculate the four-firm concentration ratio (C4). SHOW ALL WORKBased on the FTC and DOJ Horizontal Merger Guidelines described in the text, do you think the Department of Justice would attempt to block a horizontal merger between two firms with sales of $300,000 and $250,000? Explain
Question 4. On page 269

A firm has $1.5 million in sales, a Lerner index of 0.57, and a marginal cost of $50, and competes against 800 other firms in its relevant market.

What price does this firm charge its customers? SHOW all work
By what factor does this firm mark up its price over marginal cost? SHOW all work
Do you think this firm enjoys much market power? Explain
Question 13

Firms like Papa John’s, Domino’s, and Pizza Hut sell pizza and other products that are differentiated in nature. While numerous pizza chains exist in most locations, the differentiated nature of these firm’s products permits them to charge prices above marginal cost. Given these observations, is the pizza industry likely a monopoly, perfectly competitive, monopolistically competitive, or an oligopoly? Use the causal view of structure, conduct, and performance to explain the role of differentiation in the market for pizza. Then apply the feedback critique to the role of differentiation in the industry.

Get a 30 % discount on an order above $ 5
Use the following coupon code:
Order your essay today and save 30% with the discount code: CHRISTMASOrder Now
Positive SSL