Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 15.1, Problem 6Q
To determine
Find the highest Herfindahl index.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
How do we measure a four-firm concentration ratio? What does a high measure mean about the extent of competition?
The four firm concentration ratio for this industry is what
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?
Chapter 15 Solutions
Microeconomics
Ch. 15.1 - Prob. 1QCh. 15.1 - Prob. 2QCh. 15.1 - Prob. 3QCh. 15.1 - Prob. 4QCh. 15.1 - Prob. 5QCh. 15.1 - Prob. 6QCh. 15.1 - Prob. 7QCh. 15.1 - Prob. 8QCh. 15.1 - Prob. 9QCh. 15.1 - Prob. 10Q
Ch. 15 - Prob. 1QECh. 15 - Prob. 2QECh. 15 - Prob. 3QECh. 15 - Prob. 4QECh. 15 - Prob. 5QECh. 15 - Prob. 6QECh. 15 - Prob. 7QECh. 15 - Prob. 8QECh. 15 - Prob. 9QECh. 15 - Prob. 10QECh. 15 - Prob. 11QECh. 15 - Prob. 12QECh. 15 - Prob. 13QECh. 15 - Prob. 14QECh. 15 - Prob. 15QECh. 15 - Prob. 16QECh. 15 - Prob. 17QECh. 15 - Prob. 18QECh. 15 - Prob. 1QAPCh. 15 - Prob. 2QAPCh. 15 - Prob. 3QAPCh. 15 - Prob. 4QAPCh. 15 - Prob. 5QAPCh. 15 - Prob. 1IPCh. 15 - Prob. 2IPCh. 15 - Prob. 3IPCh. 15 - Prob. 4IPCh. 15 - Prob. 5IPCh. 15 - Prob. 6IPCh. 15 - Prob. 7IP
Knowledge Booster
Similar questions
- Calculate 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_forwardSuppose 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 =arrow_forwardSuppose 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? percent b. What is the Herfindahl index for the hamburger industry in this town? 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 =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_forwardHow do we measure a Herfindahl-Hirshman Index? What does a low measure mean about the extent of competition?arrow_forwardThe following table lists the market shares of the eight firms in an industry. Market Shares of Eight Firms in an Industry Firm Market Share 1 5050 2 1515 3 1515 4 1010 5 55 6 33 7 11 8 11 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_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_forwardSuppose that the six firms in industry A have annual sales of 40, 35, 12, 5, 5, and 3 percent of total industry sales. For the six firms in industry B, the figures are 35, 18, 15, 14, 10, and 8 percent. b. Calculate the four-firm concentration ratio and the Herfindahl index for each industry and compare their likely competitiveness. Instructions: Enter your answers as whole numbers. Industry A four-firm concentration ratio = Industry A Herfindahl index = Industry B four-firm concentration ratio = Industry B Herfindahl index = c. Industry A will be ________ (more/less) competitive than industry B. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardSuppose that the most popular car dealer in your area sells 25 percent of all vehicles. Instructions: Enter your answers as a whole number. a. 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? b. In that same situation, what would the four-firm concentration ratio be? percentarrow_forward
- Suppose the industry has six firms. Four firms have sales of Php 10 M each, while the other two have sales of Php 5 M each. The four firm concentration ratio is” A. 0.90 B. 0.80 C. 0.70 D. 0.60 E. No correct answerarrow_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 Expressive 6.8 LA & Company 6.2 5.3 Forever 22 Limitless 4.2 What is the four-firm concentration ratio? Round to the nearest whole percent in your calculations. Retailer Dap American Jaybirdarrow_forwardSuppose an industry is composed of six firms. Four firms have sales of $10 each, and two firms haves sales of $5 each. What is the four-firm concentration ratio for this industry? calculate HHI for this industry?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
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
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning