Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 1WNG
To determine
Determine Herfindahl index and four-firm concentration ratio.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Based on this information, the four-firm concentration ratio is?
what is the Four-firm concentration ratio (CR4)?
what is the Herfindahl-Hirshman Index (HHI)?
and how are they different?
The following table presents information on the production of five firms
that produce all of the output in an industry.
Firm
A
B
с
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?
Knowledge Booster
Similar questions
- The four firm concentration ratio for this industry is whatarrow_forwardIs it true that a merger between two firms that are not already in the top four by size can affect both the four-firm concentration ratio and the Her findahl-Hirshman Index? Explain briefly.arrow_forwardUse Table to calculate the four-firm concentration ratio for the U.S. auto market. Does this indicate a concentrated market or not?arrow_forward
- The following table lists the market shares of the eight firms in an industry. Market Shares of Eight Firms in an Industry Market Share Firm 1 2 3 4 5 6 7 8 60 15 10 8 3 2 1 1 Calculate the four-firm concentration ratio for this industry. Enter your answer in the box below, and round to the nearest whole number if necessary.arrow_forwardThe four-firm concentration ratio for the industry described in this table isarrow_forwardAssume there are 10 firms of equal size in an industry. a) If two of the firms merge, find the change in the concentration ratio: Concentration ratio change: | % b) Find the change in the Herfindahl-Hirschman index. H-H index change:arrow_forward
- Suppose an industry consists of three firms. Two firms have sales of $10 each, and one firm has sales of $30. What is the Herfindahl-Hirschman index for this industry? What is the four-firm concentration ratio?arrow_forwardCalculate the four-firm concentration ratio (CR-4) given the sales data. Assume that the firms listed are the only firms in this market. Sales (millions of dollars) 7.4 7.1 6.8 6.2 5.3 4.2 What is the four-firm concentration ratio? Round to the nearest whole percent in your calculations. Retailer Dap American Jaybird Expressive LA & Company Forever 22 Limitless four-firm concentration ratio: 28arrow_forwardUse 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%arrow_forward
- 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_forwardConsider an industry consists of three firms (Firm-A, Firm-B and Firm-C) with sales of AED300,000, AED700,000, and AED250,000; respectively. Calculate the Herfindahl-Hirschman index (HHI) for the industry. Calculate the four-firm concentration ratio (C4). Do you think the ‘Department of Justice’ (see the guideline below) would attempt to block a horizontal merger between Firm-A and Firm-C)? The Department of Justice’s Guidelines (Suppose): Suppose that the Department of Justice’s Guidelines suggest that antitrust authorities are more likely to challenge a merger when the relevant Herfindahl-Hirschman index is greater than 2,500 and the resulting increase in the index as a result of the merger is more than 200.arrow_forwardHow do we measure a four-firm concentration ratio? What does a high measure mean about the extent of competition?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning