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    Six-firm concentration ratio and Herfindahl-Hirschman index

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    Assume the market shares of the six largest firms in an industry are 12 percent each. Calculate the six-firm concentration ratio and Herfindahl-Hirschman index for this industry. What does each of these measures have to say about the degree of concentration in the industry? Explain.

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    Solution Summary

    The Six - firm concentration ratio and the Herfindahl-Hirschman index are calculated (with step by step instructions). A discussion on the degree of concentration is also included in the solution.