Suppose a ten firm industry has total sales of $35 million per year. The largest firm have sales of $10 million, the third largest firm has sales of $4 million, and the fourth largest firm has sales of $2 million. If fifth through tenth largest firms

combined have annual sales of $12 million, the four-firm concentration ratio for this industry is

A) 45.7 percent.
B) 80 percent.
C) 65.7 percent.
D) none of the above.

Answer: C

Economics

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Information on the price elasticity of demand is particularly important to managerial decision making because:

A) the higher the price elasticity of demand for a product is, the more profitable it will be to produce more of it. B) depending on the elasticity coefficient, decision makers will immediately know if a price change will cause profits to increase or decrease. C) it allows one to predict how total revenue will respond, i.e., increase or decrease, to a change in price. D) as the price elasticity coefficient approaches one, profits will increase.

Economics

To avoid the stock versus flow issue in production, some economists discuss capital usage in terms of rented capital

For example, your firm may not directly own some of the capital inputs to your production operation, and these capital inputs are employed on an hourly or daily basis. Which of the following inputs is a good example of a capital input that acts like a flow? A) Land and buildings that are owned by the firm B) A long-term licensing agreements that allow you to use a patented idea owned by another firm C) A forklift that is rented on an hourly basis D) all of the above

Economics