2. Discuss how x-inefficiencies arise and how they explain that the typical deadweight loss measure of monopoly may be underestimating total welfare loss in a monopolistic market? Include a graph in your answer that shows the increase in welfare loss due to x- inefficiencies.

3. Analyze concentration in the following industries:

a) 311511 - Fluid Milk b) 325412 - Pharmaceutical Preparations Manufacturing c) 32616 - Plastic Bottle Manufacturing

For each industry, do the following:

1. Use the economic census data to find CR4 for this industry in 2017.
2. Use the economic census data to find the HHI in 2017. Calculate the associated numbers equivalent.
3. Analyze the relevant bias(es) introduced by using Census data to measure market concentration in these industries. If a researcher used the NAICS definition, which bias(es) would apply? Discuss whether 1) the market is defined too narrowly or too broadly, 2) why, 3) which part of the market definition is concerned, product or geographic, and 4) the implication for the measure of market concentration (too small, too large)?