Chat with us, powered by LiveChat Assignments – Forey, Inc., competes against many | acewriters

Chapter 7 Homework AssignmentsQ12 Forey, Inc., competes against many other firms in a highly competitiveindus- try. Over the last decade, several firms have entered this industryand, as a consequence, Forey is earning a return on investment thatroughly equals the interest rate. Furthermore, the four-firmconcentration ratio and the Herfindahl- Hirschman index are both quitesmall, but the Rothschild index is signifi- cantly greater than zero. Basedon this information, which market structure best characterizes theindustry in which Forey competes? Explain. Q13 Firms like Papa John’s, Domino’s, and Pizza Hut sell pizza and otherproducts that are differentiated in nature. While numerous pizza chainsexist in most locations, the differentiated nature of these firms’ productspermits them to charge prices above marginal cost. Given theseobservations, is the pizzaindustry most likely a monopoly, perfectly competitive, monopolisticallycom- petitive, or an oligopoly industry? Use the causal view of structure,conduct, and performance to explain the role of differentiation in themarket for pizza. Then apply the feedback critique to the role ofdifferentiation in the industry. Q15 Nationwide Bank has approached Hometown Bank with a proposal tomerge.The following table lists the sales of the banks in the area. Use thisinformation to calculate the four-firm concentration ratio and theHerfindahl-Hirschman index. Based on the FTC and DOJ HorizontalMerger Guidelines, do you think the Justice Department is likely tochallenge the proposed merger?Sales Bank Name (in millions)MegaBank $1,100 City Bank 950 Nationwide Bank 845 Atlantic Savings785 Bulk Bank 665 Metropolitan Bank 480 American Bank 310Hometown Bank 260 Urban Bank 140 Q17 em- bles perfect competition? Which industry most closely resembles monopoly? You will need to re-enter the data on the table above into cells before calculating. AgricultureConstructionDurable manufacturingNondurable manufacturingTransportationCommunication and utilitiesWholesale tradeRetail tradeFinanceServices Own Price Elasticity ofMarket Demand-1.8-1.0-1.4-1.3-1.0-1.2-1.5-1.2-0.1-1.2 Own Price Elasticityof Demand forRepresentative Firm’sProductRothschild Index-96.20.019-5.20.192-3.50.400-3.40.382-1.90.526-1.80.667-1.60.938-1.80.667-5.50.018-26.40.045

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