1. (25 pts) There are seven firms in the X industry. Annual sales by firm in millions of dollars are shown below.

The X Industry

Firm Nudge: $30

Firm Push: $10

Firm Oust: $6

Firm Laugh: $14

Firm Ploy: $12

Firm Mock: $7

Firm Smile: $11

1a. Calculate the 4-firm concentration ratio for the X industry.

1b. Calculate the Herfindahl Index for the X Industry.

2. (25 pts) The figure below depicts the cost structure of a firm in a perfect competitive market.

Price ATC MC AVC 20 - 17 - - = 16 12 10 40 50 80 100 Quantity