Consider two industries described by the data below. Should we use a structural analysis of markets approach or a contestable market approach to analyze the competitiveness of each industry? Analyze the industries using the correct approach and explain what information we need to use the other approach. $$\begin{array} { c c c }
\text { Industry } & \text { Herfindahl index value } & \begin{array} { c }
\text { Four-firm } \
\text { concentration ratio }
\end{array} \
\text { A } & 7,500 & 80 \
\text { B } & 1,000 & 20
\end{array}$$

Question

Consider two industries described by the data below. Should we use a structural analysis of markets approach or a contestable market approach to analyze the competitiveness of each industry? Analyze the industries using the correct approach and explain what information we need to use the other approach. $$\begin{array} { c c c } 
\text { Industry } & \text { Herfindahl index value } & \begin{array} { c } 
\text { Four-firm } \
\text { concentration ratio }
\end{array} \
\text { A } & 7,500 & 80 \
\text { B } & 1,000 & 20
\end{array}$$

Quizplus · Accepted Answer

The Answer of Consider two industries described by the data below. Should we use a structural analysis of markets approach or a contestable market approach to analyze the competitiveness of each industry? Analyze the industries using the correct approach and explain what information we need to use the other approach. $$\begin{array} { c c c } 
\text { Industry } & \text { Herfindahl index value } & \begin{array} { c } 
\text { Four-firm } \
\text { concentration ratio }
\end{array} \
\text { A } & 7,500 & 80 \
\text { B } & 1,000 & 20
\end{array}$$

Consider Two Industries Described by the Data Below