Economics 19th Edition by Stanley Brue, Cambell McConnell, Campbell McConnell, Sean Masaki Flynn, Sean Flynn

Exercise 1

Suppose that a small town has seven burger shops whose respective shares of thehamburger market are (as per­centages of all hamburgers sold): 23%, 22%, 18%, 12%, 11%, 8%, and 6%. What is the four-firm concentration ra­tio of the hamburger industry in this town What is the Herfindahl index for the hamburger industry in this town 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