Suppose there are ten firms that occupy the Odell, Oregon cherry pie market. The market share of each firm is listed in the above table
a) What is the four-firm concentration ratio in this market?
b) What is the Herfindahl-Hirschman Index for this market?
c) If Firm H and Firm A merge, what is the new Herfindahl-Hirschman Index for this market?
d) A severe winter causes every firm except A, B, and E to close. With only these three firms operating, Firm A's market share is 71 percent, Firm B's market share is 23 percent, and Firm C's market share is 6 percent. What is the Herfindahl-Hirschman Index for this market now?
a) The four-firm concentration rate is 74 percent.
b) The Herfindahl-Hirschman Index is 1,782.
c) Once firms H and A merge, the new Herfindahl-Hirschman Index is 2,038.
d) The Herfindahl-Hirschman Index is now 5,606.
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When a local casino spends millions in TV ads convincing town residents to reject another casino's bid to operate in the area, the most that the casino would be willing to spend is:
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