A Herfindahl index of 5,000 would indicate:
a. a monopoly.
b. a duopoly (two firms) with equal shares.
c. an oligopoly with three firms.
d. a monopolistically competitive industry.
e. a perfectly competitive market.
b
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Saying the consumer is rational means
A) the consumer is a stand-in for all consumers. B) the consumer is getting rationed. C) the consumer makes reasonable choices. D) the consumer makes the best choices.
A monopolistically competitive firm
a. earns no long-run economic profit and is therefore allocatively efficient b. earns no long-run economic profit and therefore produces at the minimum point of its ATC curve c. earns no long-run economic profit and is allocatively efficient even though it is not producing at the minimum point of its ATC curve d. earns no long-run economic profit, is allocatively inefficient, and does not produce at the minimum point of its ATC curve e. has a chance of making a long-run economic profit and is therefore allocatively inefficient