Respective shares of the local hamburger market
Question # 00767525
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Updated on: 06/25/2020 12:13 PM Due on: 07/11/2020
Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percentages of all hamburgers sold): 28%, 26%, 23%, 10%, 7%, 4%, and 2%.
a. What is the four-firm concentration ratio of the hamburger industry in this town? %.?
b. What is the Herfindahl index for the hamburger industry in this town? .
c. 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?
The four-firm concentration ratio would be %?. The Herfindahl index would be .
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Solution: 4 firm concentration index is the sum of first four firms' share in market.