A market is comprised of five firms and their market
shares are 30%, 25%, 20%, 15%, and
10%. What is the Herfindahl index for the industry?
Question 5
An investment opportunity will pay $10 with a 20%
probability, $20 with a 40% probability,
$30 with a 30% probability, and $40 with a 10%
probability. What is the standard deviation
of the investment?
Question 6
The fully allocated cost of a product is $45. If the firm
wants to use a markup of 30%, then it
should charge a unit price of
Question 7
Investment A has an expected value of 5 and a standard
deviation of 2. Investment B has an
expected value of 10 and a standard deviation of 5. Using
the coefficient of variation
approach to comparing these two investments,
Question 8
Suppose that the firms in an oligopolistic market engage in
a price war and, as a result, all