1. Suppose that the 6 firms in an industry have market shares of 35%, 20%, 15%, 15%, 10%, and 5%.
a) What is the four-firm concentration ratio in this industry? Show all calculations and explain what a concentration ratio.
b) What is the Herfindahl index for this industry? Show all calculations and explain what a Herfindahl index .
c) Suppose another industry has a Herfindahl index of 4000. What can you conclude about the relative competitiveness of these two industries?