quiz

ART I

Question. (20 points) Suppose you are a consultant for a monopolist worried only about its policies in the short run. What would you recommend in terms of quantity changes (raise, cut, shut down, or stay put) and price changes (raise, cut, or stay put) if

MR = $100; MC = $50; and AVC = $90

PART II

Question. (20 points) Is the following (italicized) statement true or false? Explain.

The four-firm concentration ratio must be greater than the Herfindahl-Hirschman Index (HHI) for the same market

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