Final answer:
The Market Development Index (MDI) is used to measure the potential of a market, and it indicates the level of market penetration for a product or industry. In this case, the market development index for the flat-screen TV industry is 16%.
Step-by-step explanation:
The Market Development Index (MDI) is used to measure the potential of a particular market. It indicates the level of market penetration for a product or industry. To calculate the MDI, you need to divide the current market demand by the market potential and then multiply by 100. In this case, the current market demand for flat-screen TVs is 4 million units per year, and the market potential is 25 million units per year. So, the market development index for this industry is (4 million/25 million) * 100 = 16%.