3. The bicycle industry consists of seven firms. Firms 1, 2, 3, each has 20% of the market share, and Firms 4, 5, 6, 7, each has 10% of the market share. 3.а Calculate C4 for the industry. 3.b Calculate HHI for the industry. 3.с Now suppose that Firms 3 and 4 merge, so that the new merged firm has a market share of 30%. Calculate the change of HHI caused by this merger.
3. The bicycle industry consists of seven firms. Firms 1, 2, 3, each has 20% of the market share, and Firms 4, 5, 6, 7, each has 10% of the market share. 3.а Calculate C4 for the industry. 3.b Calculate HHI for the industry. 3.с Now suppose that Firms 3 and 4 merge, so that the new merged firm has a market share of 30%. Calculate the change of HHI caused by this merger.
Chapter15: Oligopoly And Strategic Behavior
Section: Chapter Questions
Problem 11P
Related questions
Question
![3. The bicycle industry consists of seven firms. Firms 1, 2, 3, each has 20% of
the market share, and Firms 4, 5, 6, 7, each has 10% of the market share.
3.а
Calculate C4 for the industry.
3.b
Calculate HHI for the industry.
3.с
Now suppose that Firms 3 and 4 merge, so that the new
merged firm has a market share of 30%. Calculate the change of HHI caused
by this merger.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa69fbe94-804e-44e4-9bb6-ab31c9a953b6%2F37557eef-3dd2-41db-8fc3-fc8cca96f77a%2Fx8vo4rh_processed.png&w=3840&q=75)
Transcribed Image Text:3. The bicycle industry consists of seven firms. Firms 1, 2, 3, each has 20% of
the market share, and Firms 4, 5, 6, 7, each has 10% of the market share.
3.а
Calculate C4 for the industry.
3.b
Calculate HHI for the industry.
3.с
Now suppose that Firms 3 and 4 merge, so that the new
merged firm has a market share of 30%. Calculate the change of HHI caused
by this merger.
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