Answer:
4400
Increase
c. An index of 10,000 corresponds to a monopoly firm with 100% market share
Explanation:
Here are the options to the last question
Why is the largest possible value of the Herfindahl index 10,000 ?
a. An index of 10,000 corresponds to 100 firms with a 1% market share each
b. An industry with an index higher than 10,000 is automatically regulated by the Justice Department
c. An index of 10,000 corresponds to a monopoly firm with 100% market share
HHI index = 60² + 20² + 20² = 4400
If one of the firms leaves the industry, the market share would be distributed between the two firms and this would cause the HHI index to increase as firm's concentration would increase
If only one firm operates in the industry, its market share would be 100% and its HHI index would be 100² = 10,000. For an industry to exist there has to be at least one firm operating in the industry,
The right answer for the question that is being asked and shown above is that: "TRUE."Almost every phase of business and economic activity falls under some form of government regulation. This statement is true as far as the phase of business and economic activity is concerned.
Answer:
B) induces buyers to consume less, and sellers to produce less.
Explanation:
Taxes are a necessary evil since they always increase the price of the goods and services that consumers buy and decrease the amount of money that producers receive from selling their goods and services. But taxes are necessary and unavoidable.
But once a market assumes all the effects of existing taxes it reaches an equilibrium price that both consumers and producers are satisfied with. If a new tax is levied than the deadweight losses are greater since consumer surplus and producer surplus are both reduced. This will lead to a reduction in the incentive that both consumers and producers have to engage in transactions. Many times consumers will substitute heavily taxed goods for other goods since they feel they are getting more from consuming those goods (consumer surplus). The same happens to producers, many producers will change their heavily taxed goods for other goods.
If the price elasticity of demand or supply of a certain good is large (elastic demand and supply), the deadweight loss will be greater.
Answer:
The demand for 10 a.m. class is higher than the demand for the 2 p.m. class.
Explanation:
The supply of seats for the psychology class at 10 a.m is the same as the class at 2 a.m. But there is a surplus of seats at 2 a.m class and shortage of seats at 2 p.m class.
Other things being constant this implies that more students are attending the 10 a.m class than the 2 p.m. class. This shows that the demand for the 10 a.m class is comparatively higher than the demand for the 2 p.m. class.
This causes a surplus of seats at 2 p.m and shortage of seats at 10 a.m.
