The following table presents information on the production of five firms that produce all of the output in an industry. Firm A B D E Output (units) 900 900 900 100 100 Instructions: Round your answers to two decimal places. a. What is the four-firm concentration ratio for this industry? b. What is the Herfindahl-Hirschman Index for this industry?

The following table presents information on the production of five firms that produce all of the output in an industry. Firm A B D E Output (units) 900 900 900 100 100 Instructions: Round your answers to two decimal places. a. What is the four-firm concentration ratio for this industry? b. What is the Herfindahl-Hirschman Index for this industry?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter23: Managing Vertical Relationships

Section: Chapter Questions

Problem 3MC

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The following table presents information on the production of five firms that produce all of the output in an industry. Firm Output (units) A 600 B 600 C 500 D 500 E 500 Instructions: Round your answers to two decimal places. a. What is the four-firm concentration ratio for this industry? % b. What is the Herfindahl-Hirschman Index for this industry?
V11 Read the article Internationally Acclaimed Quilter Claims Fraud in Lawsuit Seeking Share of Quilts’ Profits. According to the article, “[t]he lawsuit says any agreement between the quilters and the defendants was oral and was not put into writing.” After studying the statute of frauds in this unit, why is the failure to put the agreement into writing problematic? Be specific in your answer, citing any of the statutes of frauds that you think may apply to the lawsuit. "New Answer
Suppose an industry that has 10 firms. Below are the market shares for 2008 and 2013 of the 10 firms. Market Share Firms 2008 2013 A B C D E F G H I G 26% 21% 16% 10% 9% 7% 4% 3% 2% 2% 22% 23% 19% 9% 8% 7% 6% 4% 1% 1% Calculate the concentration ratio CR4 and the concentration ratio CR8 for 2008 and 2013 Calculate the Herfindahl-Hirschmann Index (HHI) for 2008 and 2013 Using the CR4, CR8, and HHI, analyze the evolution of the seller concentration in the industry. Has the industry become more or less concentrated? Using the CR4, CR8, and HHI, analyze the evolution of the potential market power of firms in the industry.
Briefly discuss the forces that have increased the level of competition faced by firms in the modern-day U.S. economy and elsewhere.
Part 2 Suppose an industry that has 10 firms. Below are the market shares for 2008 and 2013 of the 10 firms. Market Share Firms 2008 2013 A B C D E F G H I G 26% 21% 16% 10% 9% 7% 4% 3% 2% 2% 22% 23% 19% 9% 8% 7% 6% 4% 1% 1% Calculate the concentration ratio CR4 and the concentration ratio CR8 for 2008 and 2013 Calculate the Herfindahl-Hirschmann Index (HHI) for 2008 and 2013 Using the CR4, CR8, and HHI, analyze the evolution of the seller concentration in the industry. Has the industry become more or less concentrated? Using the CR4, CR8, and HHI, analyze the evolution of the potential market power of firms in the industry.
Will the firms in an oligopoly act more like a competitors or more like competitors? Briefly explain.
Is it true that the four-firm concentration ratio puts more emphasis on one or two very large films, while the Herfindahl-Hirshmau Index puts more emphasis on all the films in the entire market? Explain briefly.
Only two firms, Acme and Stuff Inc., sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $10 and zero fixed cost (so MC-ATC=$10). Price Quantity Total Revenues 10 70 65 60 55 50 45 40 28889 35 30 25 20 15 10 15 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 0 If Acme and Stuff Inc are able to collude, how much will Acme produce? 6500 12000 16500 20000 22500 24000 24500 24000 22500 20000 16500 12000 6500 0
How is monopoly different from the perfect competition? How is monopoly different from the perfect competition? What is a legal monopoly? Will the firms in an oligopoly act more like a monopoly or more like competitors? Briefly explain
Use the following table to calculate the four=firm concentration ratio for the U. S. auto market. Does this indicate a concentrated market or not? The table is............. GM 19% Ford 17% Toyota 14% Chrysler 11%
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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. Instructions: Enter your answers as a whole number. a. What is the four-firm concentration ratio of the hamburger industry in this town? Book percent Print b. What is the Herfindahl index for the hamburger industry in this town? erences c. If the top three sellers combine to form a single firm, what would happen to the four-firm concentration ratio and to the Herfindahl index? Four-firm concentration ratio = |percent Herfindahl index =