Question

Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percentages of all hamburgers sold): 27%, 25%, 21%, 12%, 8%, 5%, and 2%.a. What is the four-firm concentration ratio of the hamburger industry in this town?b. What is the Herfindahl index for the hamburger industry in this town?c. 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?

Answer 1

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Explanation

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