Purchase Solution

Calculate the four-firm ratio

Not what you're looking for?

Ask Custom Question

Still dont know how to do this type of problem......

An industry consists of three firms with sales of $200,000, $500,000, $400,000.

a. Calculate the Herfindal-Hirschmann index (HHI)
b. Calculate the four-firm ratio. (C^4)
c. Based on the US Dept. of Justic Mergers Guidelines do you think the dept would block the merger between the firms with sales of $200,000 and $400,000. Explain your findings.

Purchase this Solution
Solution Summary

The HHI index is calculated.

Solution Preview

a. The HHI index is calculated by taking the sum of the squares of the market shares of all firms in the industry. So let's first calculate the market shares of the 3 firms. The total size of the market is 200 + 500 + 400 = 1,100 (in thousands). The market shares of the 3 firms are then:

Firm 1: (200/1100)*100 = 18.18%
Firm 2: (500/1100)*100 ...

Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • Herfindahl-Hirschman index

    -Calculate the four-firm concentration ratio (C4) before the merger. -Calculate the Herfindahl-Hirschman index (HHI) before the merger. -Calculate the four-firm concentration ratio (C4) after the merger.

  • Four Firm Concentration Ratio

    Calculate the four-firm concentration ratio in the market for product X. Total market sales=$1000,000 Four firm concentration ratio is defined as the percentage of total market sales accounted for by four leading firms.

  • Calculating HHI index and C4 Ratio

    Calculate the four-firm concentration ratio (C4) before the merger. Show your work. C4=Combined market share of largest four firm=34.84+27.87+20.91+6.97=90.59% b. Calculate the four-firm concentration ratio (C4) after the merger.

  • Concentration Ratios and the Herfindahl-Hirschman Index

    The four firms in Industry D have market shares of 80, 10, 5 and 5 percent, respectively. a. Calculate the three- and four-firm concentration ratios for each industry. b. Calculate the Herfindahl-Hirschman Index for each industry. c.

  • Four-Firm Concentration Ratio

    353270 Four-Firm Concentration Ratio for Corn Growers in the U.S. Guess as to what might be the four firm concentration ratio for corn growers in the United States (knowing there are about 40,000 just in Iowa)?

  • Four firm concentration ratio and HHI

    b. calculate the HHI (Herfindahl Index) Please see the attached file. The four firm concentration ratio and the HHI (Herfindahl Index) have been calculated.

  • Market Share and Concentration Ratio

    Calculate the four firm concentration ratios for the two industries. Which industry is more concentrated? To find the four firm concentration ratio, you will add the market shares of the four largest firms in each industry.

  • Market Power and Monopoly

    Calculate the Herfindahl-Hirschman index (HHI). SHOW ALL WORK b. Calculate the four-firm concentration ratio (C4). SHOW ALL WORK c.

  • Calculating HHI and Concentration Ratio

    Calculate the four-firm concentration ratio. There are only three firms in the industry. We can calculate 3-firm concentration ration in this case C3=24%+56%+20%=100% c.

  • Measures of Concentration and Herfindal Index

    A four-firm concentration ratio of 90 percent means the largest four firms account for 90 percent of sales.

View More Related Solutions