Whenever the largest firm in a concentrated industry breaks into two equal sized parts, the four firm concentration ratio ___ and the Herfindahl-Hirschman Index ____:

Question

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The four-firm concentration ratio will fall because the market share of the largest firm will be halved. The Herfindahl-Hirschman Index will also fall because the market share of the largest firm will be reduced.

Whenever the Largest Firm in a Concentrated Industry Breaks into Two