Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 12.1, Problem 2ST
To determine
Determine the four-firm concentration ratio and Herfindahl index.
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Firm
Market Share (%)
A
18
B
17
C
17
D
17
E
16
F
15
Refer to the data. Suppose that firms in this industry split up such that there were 20 firms, each with a 5 percent market share. The four-firm concentration ratio and the Herfindahl index respectively would be
Consider a market with four firms. Suppose the first firm has a
39% market share, the second firm has a 30% market share, the third firm has a 20% market share, and the fourth firm has a 11% market share. Using the Herfindahl-Hirschman Index (HHI), what is this market's level of concentration?
Now suppose the third and fourth firms propose to merge. Were they to merge, then the market's HHI would increase to?
Given the increase in the HHI that would be caused by the proposed merger, would the government likely allow such a merger to occur?
Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percentages of all hamburgers sold): 23 percent, 22 percent, 18 percent, 12 percent, 11 percent, 8 percent, and 6 percent. What is the four-firm concentration ratio of the hamburger industry in this town? What is the Herfindahl index for the hamburger industry in this town? If the top three sellers combined to form a single firm, what would happen to the four-firm concentration ratio and to the Herfindahl index
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Similar questions
- Suppose that the most popular car dealer in your area sells 10 percent of all vehicles. If all other car dealers sell either the same number of vehicles or fewer, what is the largest value that the Herfindahl index could possibly take for car dealers in your area? In that same situation, what would the four-firm concentration ratio be?arrow_forwardSuppose that a small town has six burger shops whose respective shares of the local market are (as percentages of all hamburgers sold): 26%, 20%, 18%, 14%, 12%, 10%, What is the four-firm concentration ratio of the hamburger industry and what is the Hirchmann Herfindahl Index (HHI) for the hamburger industry in this town?arrow_forwardFirm Market Share (%) A B C D E F 30 22 18 17 7 6 Refer to the data. Suppose that firms in this industry split up such that there were 50 firms, each with a 2 percent market share. The four-firm concentration ratio and the Herfindahl index respectively would be Multiple Choice 8 percent and 200. 8 percent and 8. 200 percent and 16. 100 percent and 10,000.arrow_forward
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