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Maslowich
3 years ago
12

Suppose that three firms make up the entire wig manufacturing industry. One has a 60% market share, and the other two have a 20%

market share each. The Herfindahl index of this industry is . Mane Attraction, one of the firms with a 20% market share in the wig manufacturing industry, leaves the market. This would cause the Herfindahl index for the industry to . Why is the largest possible value of the Herfindahl index is 10,000
Business
1 answer:
mr_godi [17]3 years ago
7 0

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,

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When group investors become aware of overseas investment opportunities and are willing to diversify their portfolios internation
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Answer:

they benefit from an expanded opportunity set.

Explanation:

As most of the business organizations focused on grabbing the investment opportunities which leads to diversify their business in terms of expanding the business in various locations, maximize the market share etc

This can be done with the help of opportunity set i.e. to expanded through which the firm could get the benefit of it

Hence, this would be the answer

3 0
3 years ago
Asonia Co. will pay a dividend of $4.95, $9.05, $11.90, and $13.65 per share for each of the next four years, respectively. The
kompoz [17]

Answer: $30.86

P = $4.95/(1 + .92) + $9.05/(1 + .92)^2 + $11.90/(1 + .92)^3 + $13.65/(1 + .92)^4

P = 4.53+7.59+ 9.14+ 9.60=$30.86

Explanation:

Dividend discount: Dividend year 1 divided by (1 plus the required rate of return)

PLUS Dividend year 2 divided by (1 plus the required rate of return) to the second power

PLUS Dividend year 3 divided by (1 plus the required rate of return) to the third power

PLUS Dividend year 4 divided by (1 plus the required rate of return) to the fourth power

7 0
3 years ago
Tom walks bethany's dog once a day for $50 per week. bethany values this service at $60 per week, while the opportunity cost of
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The total surplus is A. $30.

The surplus is the amount of money that is let over after all requirements have been met/paid. This can also be an excess amount of production that is over the amount of money demanded. The opportunity cost is $30, which is what Tom values his time being worth that he is not getting due to dog walking.

5 0
3 years ago
Johnson & Johnson has a reputation for being a company with high levels of corporate social responsibility to all of its sta
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1. Organizations have the knowledge and resources to do good in the community, so they are responsible for helping others.

Explanation:

<u>Companies that exist for the sake of making profits are prone to do it at the expense of other social and economic structures</u>. Thus, social responsibility is an important part of running a big firm with massive resources that can be put to this use.

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3 0
3 years ago
Samra lives in and attends a university in Brazil. Next semester, she plans to study abroad in Mongolia.
Serjik [45]

Answer:

A.) Mongolian tögrög , Brazilian real

B.) Brazilian real, Mongolian tögrög

Explanation:

Currency of Brazil is Brazilian real

Currency of Mongolia is Mongolian tögrög

A.)

Samra lives in and attends a university in Brazil. Next semester, she plans to study abroad in Mongolia.

Therefore, Samra will demand Mongolian tögrög and will supply Brazilian real.

B.)

Watch Me is a manufacturer of designer watches based in Brazil. Though the watches are produced exclusively in Brazil, they are sold throughout the world. Watch Me does an especially robust business in Mongolia. Therefore, Watch Me will demand Brazilian real and will supply Mongolian tögrög

Reason -

For the first part, samra is in need of Mongolian currency in order to make her plan in action to study abroad but at present she is holding with her Brazilian currency, so hereby the demand is considered of Mongolian currency and supply accordingly will be of Brazilian currency to complete the transaction.

For the second part, Watch Me is manufacturer based in Brazil and all the operations related to manufacture occurred exclusively in Brazil , so when sale of watches done in Mongolian currency , there is need to remit the sale consideration to the Brazil . Accordingly he has to change the Mongolian currency to Brazilian currency and as a result he is in demand of Brazilian real by way of supplying Mongolian currency in exchange.

7 0
3 years ago
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