Select the false statement.Both CR3 and CR4 concentration measures point to the same market(either A or B) having more market power.○ The HHI of market A must be larger than the HHI of market B.O The HHI of market B is less than 1,798 (in units of squared percent).(Hint: for positive X and Y, (X + Y) 2 > X² + y²)○ The 6th largest firm in market B captures less than 8 percent of themarket. Suppose we have two markets, A and B, each consisting of sevenfirms. The market shares of the 5 largest firms (ordered by marketshare) are shown in the table below.Firm rank Market share (%)Market A Market B12022220203202042015515156??7??

Answered: Suppose we have two markets, A and B,…

Suppose we have two markets, A and B, each consisting of seven firms. The market shares of the 5 largest firms (ordered by market share) are shown in the table below.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 7 Suppose two firms (X and Y) want to merge together. X currently controls 50.59% of the market, and Y currently controls 35.96% of the market. If X and Y merge, by how many points will the HHI increase? with X and Y separate) Hint this is the value of (HHI with X and Y merged) - (HHI Round your answers to two (2) decimal places if necessary
Suppose we have two markets, A and B, each consisting of seven firms. The market shares of the 5 largest firms (ordered by market share) are shown in the table below. True or false? (i) The CR3 and CR4 concentration ratios both point to the same market (either A or B) having more market power. (ii) The 6th largest firm in market B captures at most 8 percent of the market. (iii) The HHI of market B is at most 1,798 (in units of squared percent). (Hint: for positive x and y, (x+y)2=x2+y2+2xy≥x2+y2.) (iv) The HHI of market A is definitely larger than the HHI of market B.
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