Chapter 11: Q. 15 (page 272)
Why can it be difficult to decide what a “market” is for purposes of measuring competition?
Short Answer
The market definition could be difficult because most commodities are proven to meet a variety of demands.
Chapter 11: Q. 15 (page 272)
Why can it be difficult to decide what a “market” is for purposes of measuring competition?
The market definition could be difficult because most commodities are proven to meet a variety of demands.
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Get started for freeIs it true that the four-firm concentration ratio puts more emphasis on one or two very large firms, while the Herfindahl - Hirshman Index puts more emphasis on all the firms in the entire market? Explain briefly.
Do you think it is possible for the government to
outlaw everything that businesses could do wrong? If so, why does the government not do that? If not, how can regulation stay ahead of rogue businesses that push the limits of the system until it breaks?
Is it true that a merger between two firms that are not already in the top four by size can affect both the four-firm concentration ratio and the Herfindahl - Hirshman Index? Explain briefly.
If public utilities are a natural monopoly, what would be the danger in deregulating them?
From the graph you drew to answer Exercise 11.6, would you say this transit system is a natural monopoly? Justify.
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