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Question: a homogeneous good industry is composed of 3 firms you...

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A homogeneous good industry is composed of 3 firms. You are given the following information on output, price and marginal cost of each firm: q, 200 q2-500 93100 p- 50 41.7 c2 29.2 c3 45.8 Remember that for each firm where α, is the market share of firm i and η is the price elasticity of demand. a)Calculate the 2-firm concentration ratio. b)Calculate the Herfindahl index c) Calculate the number equivalent. d) Calculate the Lerner index of ach firm. e Calculate the price elasticity of demand. a) The bicycle industry consists of seven firms. Firms 1, 2, 3, 4 each has 10% market share, and firms 5,6,7 each has 20% market share. Using the concentration measures, answer the following questions (i) Calculate 4-firm concentration ratio for this industry (ii) Calculate the Herfindahl index (IHH) for this industry (iii) Now, suppose that firms 1 and 2 merge, so that the new firm will have a market share of 20%

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