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Microeconomics 20th Edition by Campbell McConnell, Stanley Brue,Sean Flynn
Edition 20ISBN: 978-0077660819Microeconomics 20th Edition by Campbell McConnell, Stanley Brue,Sean Flynn
Edition 20ISBN: 978-0077660819 Exercise 7
Answer the following questions, which relate to measures of concentration:
a. What is the meaning of a four-firm concentration ratio of 60 percent 90 percent What are the shortcomings of concentration ratios as measures of monopoly power
b. Suppose that the five firms in industry A have annual sales of 30, 30, 20, 10, and 10 percent of total industry sales. For the five firms in industry B, the figures are 60, 25, 5, 5, and 5 percent. Calculate the Herfindahl index for each industry and compare their likely competitiveness.
a. What is the meaning of a four-firm concentration ratio of 60 percent 90 percent What are the shortcomings of concentration ratios as measures of monopoly power
b. Suppose that the five firms in industry A have annual sales of 30, 30, 20, 10, and 10 percent of total industry sales. For the five firms in industry B, the figures are 60, 25, 5, 5, and 5 percent. Calculate the Herfindahl index for each industry and compare their likely competitiveness.
Explanation
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A four-firm concentration ratio, express...
Microeconomics 20th Edition by Campbell McConnell, Stanley Brue,Sean Flynn
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