Use the information below to answer the following questions.
Fact 10.4.1 GameStop Racks Up the Points
No retailer has more cachet among gamers than GameStop. For now, only Wal-Mart has a larger market share-21.3% last year. GameStop's share was 21.1% last year, and may well overtake Wal-Mart this year. But if new women gamers prefer shopping at Target to GameStop, Wal-Mart and Target might erode GameStop's market share.
Source: Fortune, June 9, 2008
-Refer to Fact 10.4.1. The four-firm concentration ratio for the game market in the United States ________. The HHI for the game market in the United States ________.
A)equals 100; equals 10,000
B)exceeds 60; is less than 1,000
C)is less than 60; is less than 1,000
D)ranges from approximately 40 percent to 85 percent; ranges from approximately 900 to 2,025
E)is close to zero; is close to zero

Question

Quizplus · Accepted Answer

The fact states that GameStop's market share was 21.1% last year, while Wal-Mart had a market share of 21.3%. This indicates that the four-firm concentration ratio for the game market in the United States ranges from approximately 40 percent (21.1% + 21.3% = 42.4%) to 85 percent, which is the range provided in option D. The fact does not provide enough information to calculate the exact HHI for the game market, but the range provided in option D (approximately 900 to 2,025) is consistent with the HHI formula. Therefore, option D is the correct choice.

Use the Information Below to Answer the Following Questions