Which of the following is a shortcoming of concentration ratios as measures of monopoly power? O The data are for international products. O They only show the dispersion of size among the top four firms. O They do not account for interindustry competition. O They do not pertain to the nation as a whole. b. Suppose that the five firms in industry A have annual sales of 30, 30, 20, 10, and 10 percent of total industry sales. For the five firms in industry B, the figures are 60, 25, 5, 5, and 5 percent. Calculate the Herfindahl index for each industry and compare their likely competitiveness. Herfindahl index for industry A = Herfindahl index for industry B =
Which of the following is a shortcoming of concentration ratios as measures of monopoly power? O The data are for international products. O They only show the dispersion of size among the top four firms. O They do not account for interindustry competition. O They do not pertain to the nation as a whole. b. Suppose that the five firms in industry A have annual sales of 30, 30, 20, 10, and 10 percent of total industry sales. For the five firms in industry B, the figures are 60, 25, 5, 5, and 5 percent. Calculate the Herfindahl index for each industry and compare their likely competitiveness. Herfindahl index for industry A = Herfindahl index for industry B =
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.6P
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![Which of the following is a shortcoming of concentration ratios as measures of monopoly power?
O The data are for international products.
O They only show the dispersion of size among the top four firms.
O They do not account for interindustry competition.
O They do not pertain to the nation as a whole.
b. Suppose that the five firms in industry A have annual sales of 30, 30, 20, 10, and 10 percent of total industry sales. For the five firms
in industry B, the figures are 60, 25, 5, 5, and 5 percent. Calculate the Herfindahl index for each industry and compare their likely
competitiveness.
es
Herfindahl index for industry A =
Herfindahl index for industry B =
vthan industry B.
Your comparison of their likely competitiveness: Industry A will be (Click to select)
(Click to select)
more competitive
less competitive](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ea3a059-0a8a-4779-bed8-ef5706e6b286%2F699eb61b-0ce3-46b3-afec-b68c2a34bac0%2F2ngb7tq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Which of the following is a shortcoming of concentration ratios as measures of monopoly power?
O The data are for international products.
O They only show the dispersion of size among the top four firms.
O They do not account for interindustry competition.
O They do not pertain to the nation as a whole.
b. Suppose that the five firms in industry A have annual sales of 30, 30, 20, 10, and 10 percent of total industry sales. For the five firms
in industry B, the figures are 60, 25, 5, 5, and 5 percent. Calculate the Herfindahl index for each industry and compare their likely
competitiveness.
es
Herfindahl index for industry A =
Herfindahl index for industry B =
vthan industry B.
Your comparison of their likely competitiveness: Industry A will be (Click to select)
(Click to select)
more competitive
less competitive
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