Suppose that the demand in a particular industry is given by Q^d = 500 − 2P.When the market price in the industry is $50 per unit,total demand in the industry is _________.Furthermore,assume that the entire market consists of four firms that share the market equally.The HHI under these conditions is then _________.

Question

Quizplus · Accepted Answer

The total demand at a price of $50 is calculated by substituting P = 50 into the demand equation: Q = 500 - 2(50) = 400 units. For the HHI, since the market is equally shared among four firms, each has a 25% market share. The HHI is calculated as the sum of the squares of the market shares of all firms in the market, in percentage terms. Thus, HHI = 4*(25^2) = 2,500.

Suppose That the Demand in a Particular Industry Is Given