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 percent, 26 percent, 21 percent, 12 percent, 8 percent, 4 percent, and 2 percent. Instructions: Enter your answers as a whole number. a. What is the four-firm concentration ratio of the hamburger industry in this town? percent b. What is the Herfindahl index for the hamburger industry in this town? c. If the top three sellers combine to form a single firm, what would happen to the four-firm concentration ratio and to the Herfindahl index? Four-firm concentration ratio = percent Herfindahl index =

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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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 percent, 26 percent, 21 percent, 12 percent, 8 percent, 4 percent, and 2 percent.
Instructions: Enter your answers as a whole number.
a. What is the four-firm concentration ratio of the hamburger industry in this town?
percent
b. What is the Herfindahl index for the hamburger industry in this town?
c. If the top three sellers combine to form a single firm, what would happen to the four-firm concentration ratio and to the Herfindahl
index?
Four-firm concentration ratio =
percent
Herfindahl index =
Transcribed Image Text: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 percent, 26 percent, 21 percent, 12 percent, 8 percent, 4 percent, and 2 percent. Instructions: Enter your answers as a whole number. a. What is the four-firm concentration ratio of the hamburger industry in this town? percent b. What is the Herfindahl index for the hamburger industry in this town? c. If the top three sellers combine to form a single firm, what would happen to the four-firm concentration ratio and to the Herfindahl index? Four-firm concentration ratio = percent Herfindahl index =
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