PART 2. Are existence of profits / higher rates of return a sure sign of market power and DWL inefficiency? Imagine two industries: Industry A: All firms use a common technology with the cost function c(q) = 50 + 109 + 2q? Industry B: Most firms use a common technology with the cost function c(q) = 50 + 10q + 2q?, but two firms have, for some unexplained reason, a superior technology c(q) = 10 + 10q+q? The market demand is given by Q(P) = 80 - P in both industries. Your task is to compare the long run equilibrium in these industries: A. Which industry will have a higher profit/revenue ratio (which is used as a proxy for the market power index L when only industry totals for profit and revenues are available) B. In which industry do we have higher concentration as measured by HHI? C. How is the profit/revenue ratio which is a proxy for L (as defined in part a above) correlated with HHI across these two industries? D. Explain how part 2 is related to part 1 of the