Question

The market shares (in percentage terms) for the 12 firms that comprise an industry are 15, 12, 11, 10, 8, 7, 7, 6, 6, 6, 6, and 6. The Herfindahl index is __________ and the four-firm concentration ratio is __________. Group of answer choices 932; 48 percent 1,032; 27 percent 1,000; 48 percent 950; 24 percent none of the above

Answer 1

Answer:

932; 48 percent

Explanation:

The computation of the Herfindahl index  is shown below:

= (15)² + (12)² + (11)² + (10)² + (8)² + (7)² + (7)² + (6)² + (6)² + (6)² + (6)² + (6)²

= 225 + 144 + 121 + 100 + 64 + 49 + 49 + 36 + 36 + 36 + 36 + 36

= 932

And, the  four-firm concentration ratio is

= 0.15 + 0.12 + 0.11 + 0.10

= 0.48

Simply we applied the above computation