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Worked Problems
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1
Suppose that the 6 firms in an industry have market shares of 35%, 20%, 15%, 15%, 10%, and 5%.
  1. What is the four-firm concentration ratio in this industry?
  2. What is the Herfindahl index for this industry.
  3. Suppose another industry has a Herfindahl index of 4000. What can you conclude about the relative competitiveness of these two industries?






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