Consider two industries, industry Q and industry Z.In industry Q there are 10 companies, each with a market share of 10% of total sales.In industry Z, there are eight companies.One company has a 65% market share and each of the other seven firms has a market share of 5%.
a.Calculate the four-firm concentration ratio for each industry.
b.Calculate the Herfindahl-Hirschman Index (HHI)for each industry.
c.What do the values of the two concentration measures imply about the degree of market power in the two industries?

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The Answer of Consider two industries, industry Q and industry Z.In industry Q there are 10 companies, each with a market share of 10% of total sales.In industry Z, there are eight companies.One company has a 65% market share and each of the other seven firms has a market share of 5%.
a.Calculate the four-firm concentration ratio for each industry.
b.Calculate the Herfindahl-Hirschman Index (HHI)for each industry.
c.What do the values of the two concentration measures imply about the degree of market power in the two industries?

Consider Two Industries, Industry Q and Industry Z