markup - 2024 ACF Regionals

Question

A 2012 paper by De Loecker and Warzynski uses plant-level data to estimate this variable, surprisingly finding that this variable increases when firms start exporting. For 10 points each:

[10h] Name this economic variable that, under assumptions of monopolistic competition, equals 1 over “1 plus the reciprocal of the price elasticity of demand” in a namesake “rule.”

ANSWER: markup

[10e] The markup rule sets the price equal to the markup times this quantity. A firm in a perfectly competitive market will produce as long as the price is above this quantity, which is the cost of producing an extra unit.

ANSWER: marginal cost

[10m] The recent secular trend of increasing markups is explained by a “global tide” of firms having this property, in which they can influence the pricing of their products, according to Jan Eeckhout’s (“AKE-howt’s”) The Profit Paradox. Firms in concentrated markets are more likely to have this property.

ANSWER: market power [reject “market share”]

Back to bonuses

Summary


2024 ACF Regionals @ Berkeley	01/27/2024	Y	3	6.67	67%	0%	0%
2024 ACF Regionals @ Cornell	01/27/2024	Y	3	10.00	67%	33%	0%
2024 ACF Regionals @ JMU	01/27/2024	Y	10	11.00	100%	10%	0%
2024 ACF Regionals @ Nebraska	01/27/2024	Y	6	15.00	100%	50%	0%
2024 ACF Regionals @ Ohio State	01/27/2024	Y	3	16.67	100%	67%	0%
2024 ACF Regionals @ Rutgers	01/27/2024	Y	5	12.00	100%	20%	0%
2024 ACF Regionals @ Imperial	01/27/2024	Y	8	8.75	88%	0%	0%
2024 ACF Regionals @ Vanderbilt	01/27/2024	Y	5	10.00	80%	20%	0%
2024 ACF Regionals @ MIT	01/27/2024	Y	3	10.00	100%	0%	0%

Data


Stanford A	Berkeley A	10	0	10
Berkeley B	Berkeley C	0	0	0
Stanford C	Stanford B	10	0	10
Cornell A	Cornell C	10	10	20
RIT A	Binghamton	0	0	0
Cornell B	RIT B	10	0	10
GWU A (UG)	Virginia B (UG)	10	0	10
Liberty B (DII)	GWU B (Grad)	10	0	10
William & Mary A (UG)	JMU A (UG)	10	0	10
Duke A (UG)	JMU B (UG)	10	0	10
UNC B (UG)	Liberty C (DII)	10	0	10
Maryland A (Grad)	Maryland C (DII)	10	0	10
Virginia C (UG)	Maryland B (UG)	10	0	10
UNC C (UG)	Roanoke College A (DII)	10	0	10
Liberty A (Grad)	UNC D (DII)	10	0	10
UNC A (Grad)	Virginia A (UG)	10	10	20
Claremont A	Iowa B	10	0	10
Iowa A	Appalachian State	10	0	10
UBC A	Rice A	10	10	20
Michigan State A	Sorbonne	10	0	10
Texas A&M B	Texas A&M A	10	10	20
Texas A	UW A	10	10	20
Kenyon	Michigan C	10	10	20
Michigan A	Ohio State B	10	10	20
Ohio State A	Michigan B	10	0	10
John Jay	Penn	10	10	20
Columbia B	Johns Hopkins	10	0	10
Haverford	NYU B	10	0	10
NYU A	Rowan	10	0	10
Columbia C	Vassar	10	0	10
Bristol	Oxford C	0	0	0
Oxford B	Cambridge B	10	0	10
Durham A	Warwick	10	0	10
Imperial B	Edinburgh	10	0	10
Imperial A	Durham B	10	0	10
Cambridge C	KCL	10	0	10
Oxford A	Kiel	10	0	10
Cambridge A	Sheffield	10	0	10
Georgia Tech B	Alabama	10	0	10
Geodesic	Tennessee	10	10	20
Kentucky	Harding	10	0	10
MTSU	Vanderbilt A	0	0	0
South Carolina	Georgia Tech A	10	0	10
Dartmouth B	Dartmouth A	10	0	10
Harvard A	Harvard B	10	0	10
Tufts B	Tufts A	10	0	10