fill in the blank and answer mcq please thanks nomic Regulation and Antitrust Po

Question

fill in the blank and answer mcq please
thanks

nomic Regulation and Antitrust Policy ed Assignment Due Monday 11.20.37 at 02 00 AM ttempts Keep the Highest3 6. The Herfindahl index suppose that three firms mako up the entire tre manufacturing industry. One has a 60% market share, and the other two heve a 20% market share each The Herfindahl index of this industry is A new frm. Tread Tough, enters the tire manufacturing industry and immediately captures 20% share of the market This would cause the Herfindahl index for the industry totise Why is the largest possible value of the Herfindahl index fall O An indea of 10,000 corresponds to monopol rket share O An index of 10,000 corresponds to 100 firms weare each. O An industry with en index higher than 10,000 is automatically regulated by the Justice Department rise Grade Now

Explanation / Answer

(1)

HHI = (60)2 + (20)2 + (20)2 = 3,600 + 400 + 400 = 4,400

(2)

Entry of new firm will cause HHI to fall.

[As more firms enter in market and number of firms is higher, the market becomes more fragmented and less concentrated, so HHI decreases]

(3) Option (A)

When there is only 1 firm in the market, this is a monopoly where the firm has 100% market share, therefore

HHI = (100)2 = 10,000 = Highest possible value of HHI

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.