Question

29 of 48 (24 complete) This Question: 1 pt Suppose that a company based in Dallas, Texas, initially confronts only four other rival firms. Its own market share is 38 percent, which ties it with the other largest producer and seller in the industry. The market share of each of the other three firms is 8.00 percent Then a sbeth firm, located in Cleveland, Ohio, enters the same industry. The new firm captures 4.00percent market share and the market share of one of the smallest three original incumbents dedines to 4.00 percent as wel After the Cleveland firm's entry into the industry, what are the values of the four-firm concentration ratio and of the Herfindahl-Hirschman index? After the Cleveland firm's entry into the industry, the four-fimm concentration ratio for this industry O A. 920 percent OB. 58.0 percent C. 84.0 percent OD 88.0 percent After the Cleveland firm's entry into the industry, the value of the Herfindahl-Hirschman index is A 1.6040 B. 3,0320 OC 3,048.0. OD 2.9840 Click to select your answer 9:18 PM 7/30/2020 hp

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Answer 1

1. answer is A

first two firms have ties so they have market share = 38 % and 38%

other three firms have 8%, 8%, 8%. but one of them come down by 4% so we only take higher sales percentage of first 4 firms so

(38+38+8+8) = 92%

2.answer is C

first two firms have ties so they have market share = 38 % and 38%

other two firms have 8%, 8%.. but one of out of three firm come down by 4% and new firms also captures 4% market shares. so all firm have percentage as follows and HHI will be:

1	$                 38.00	1444.00
2	$                 38.00	1444.00
3	$                    8.00	64.00
4	$                    8.00	64.00
5	$                    4.00	16.00
6	$                    4.00	16.00
		3048.00