Listed in the above table are the market shares for the firms in two different industries. Each industry has only eleven firms. Find the four-firm concentration ratio and the Herfindahl-Hirschman Index for each industry
What will be an ideal response?
Industry A has a four-firm concentration ratio of 59 percent and a Herfindahl-Hirschman Index of 1,186. Industry B has a four-firm concentration ratio of 39 percent and Herfindahl-Hirschman Index of 914.
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What effect has the presence of federal deposit insurance had on the banking industry?
A) Banks have made it more difficult for customers to qualify for loans. B) Depositors have become more vigilant in monitoring the decisions made by managers of their banks. C) Banks have made riskier loans. D) Banks now hold more excess reserves.
Riskier investments tend to sell for:
A. lower prices so they provide a higher expected rate of return to compensate for risk. B. higher prices so they provide a higher expected rate of return to compensate for risk. C. higher prices; that is why they are considered to be riskier. D. prices directly correlated with expected rates of return.