There are six firms in an industry, with market shares of 50 percent, 25 percent, 10 percent, 10 percent, 3 percent and 2 percent. The four firm concentration ratio is ________, and the HHI is ________.

Question

Quizplus · Accepted Answer

The four-firm concentration ratio is the sum of the market shares of the four largest firms: 50% + 25% + 10% + 10% = 95%. The Herfindahl-Hirschman Index (HHI) is calculated by squaring each firm's market share and summing the results: 50^2 + 25^2 + 10^2 + 10^2 + 3^2 + 2^2 = 3338.

There Are Six Firms in an Industry, with Market Shares