Question

Firm Market Share (%) A 50 B 35 C 8 D 4 E 2 F 1...

Firm Market Share (%)
A 50
B 35
C 8
D 4
E 2
F 1

Refer to the data. Suppose that firms in this industry split up such that there were 10 firms, each with a 10 percent market share. The four-firm concentration ratio and the Herfindahl index respectively would be

Multiple Choice

  • 100 percent and 10,000.

  • 40 percent and 40.

  • 1,000 percent and 400.

  • 40 percent and 1,000.

Business   Economics   
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Homework Answers

Answer #1

If the firms in the given industry split up in the manner mentioned in the question then the following series will be obtained:

The correct option is 40 per cent and 1000 as shown in the image.

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