1. Lisa's Lawn Company (LLC) is a lawn-mowing business in a perfectly competitive market for lawn-mowing services. The following table describes Lisa's costs.

Quantity (lawns per hour) Total Cost (dollars per lawn)

0 $30

1 40

2 55

3 75

4 100

5 130

6 165

a. If the market price is $30 per lawn, how many lawns per hour does Lisa's LLC mow?

b. If the market price is $30 per lawn, what is Lisa's profit in the short run?

c. If the market price falls to $20 per lawn, how many lawns per hour does Lisa's LLC mow?

d. If the market price falls to $20 per lawn, what is Lisa's profit in the short run?

e. At what market price will Lisa shut down?

f. When Lisa shuts down, what will be her economic loss?

2.You are a monopolist facing the following demand schedule. You produce an output at a constant average and marginal cost of $12.

Price Quantity

$20 1

18 2

16 3

14 4

a. Calculate marginal revenue (MR) for each level of output.

b. Find the profit-maximizing price and quantity.

c. How much economic profit will you earn?

3.The following table lists the percentage of market share for 6 firms in the toy industry.

Firm Market share

A 40 %

B 6 %

C 14 %

D 2 %

E 3 %

F 35 %

a. What is the 4-firm concentration ratio (CR4) in this industry?

b. What is the Herfindahl-Hirschman Index (HHI) for this industry?

c. According to the CR4 and HHI measures, would you consider the toy industry (above) to be an oligopoly and why?