Week 1 Flashcards by Aslan Tunc | Brainscape

Q

What is the profit for a monopolist?

A

Profit(Q) = p(Q)*Q - C(Q), where C(Q) = F+cQ

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Q

What is the marginal revenue?

A

Differential of price*quantity

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Q

What is the Lerner index?

A

We start with (p-MC)/p
We finish with (p-c)/p = 1/Ed

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Q

What is the different between a price and quantity-setting monopolist?

A

Nothing

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Q

What is the difference between a price and quantity-setting monopolist?

A

Nothing

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Q

How do we measure the Herfindahl-Hirschman Index?

A

HHI = s^21 + … S^2n

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Q

What are the problems of the HHI?

A

-Doesn’t consider the potential competition in vertical chain/within market segments
-Natural monopolies
-Is the dominant firm actually a problem?

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