Use the estimated elasticities to calculate the Rothschild index for each industry
tutor4helpyouRefer to the figure below:
(a) Use the estimated elasticities to calculate the Rothschild index for each industry.
Instruction: Round your answers to 3 decimal places.
Industry | Own Price Elasticity of Market Demand | Own Price Elasticity of Demand for Representative Firm's Product | Rothschild index |
Agriculture | -1.8 | -96.2 | [removed] |
Construction | -1.0 | -5.2 | [removed] |
Durable manufacturing | -1.4 | -3.5 | [removed] |
Nondurable manufacturing | -1.3 | -3.4 | [removed] |
Transportation | -1.0 | -1.9 | [removed] |
Communication and utilities | -1.2 | -1.8 | [removed] |
Wholesale trade | -1.5 | -1.6 | [removed] |
Retail trade | -1.2 | -1.8 | [removed] |
Finance | -0.1 | -5.5 | [removed] |
Services | -1.2 | -26.4 | [removed] |
(b) Based on these calculations, which industry most closely resembles perfect competition?
Transportation.
Wholesale trade.
Finance.
Retail trade.
(c) Which industry most closely resembles monopoly?
Wholesale trade.
Retail trade.
Finance.
Transportation.
12 years ago
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