Assume an industry is comprised of three firms—A, B, and C. Firm A controls 50 percent of the market, Firm B controls 30 percent, and Firm C controls 20 percent. What is the value of the Herfindahl Index?

If Molly Bee increases her work hours when her wage increases, then

A) the substitution effect of the wage increase outweighs the income effect. B) the income effect of the wage increase outweighs the substitution effect. C) leisure is an inferior good to Molly. D) Molly is spending beyond her means.

The behavior of the monopolistic firm

A. maximizes the benefits to consumers, given the resources available to the economy. B. increases output in order to raise prices in the short term. C. results in excess capacity and inefficiency. D. results in entry into the market by other firms.