In his article, "The Nature of the Firm," Ronald Coase
a. suggested that monopolies may be more innovative than competitive firms
b. argued that the economy should be organized into one large firm
c. provided an answer to the question, "Why do firms exist?"
d. focused on the concept of adverse selection
e. analyzed concentration in U.S. industry
C
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Suppose an industry has total sales of $25 million per year. The two largest firms have sales of $6 million each, the third largest firm has sales of $2 million, and the fourth largest firm has sales of $1 million
The four-firm concentration ratio for this industry is A) 36 percent. B) 60 percent. C) 50 percent. D) 25 percent.
Lanny is attempting to determine his firm’s economic profits for the previous year. He already knows what its accounting profits were. To calculate its economic profits, Lanny also needs to know the firm’s ______ for the previous year.
a. economic income b. implicit costs c. marginal benefits d. explicit losses