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”]
<Social Science>
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% |