ECONOM icr rk #8: Chapter 15 Pre-Final Assignmu… Question 7 (of 10) value 10.00

Question

ECONOM icr rk #8: Chapter 15 Pre-Final Assignmu… Question 7 (of 10) value 10.00 points Suppose the burrito market is divided as follows: Market Share(%) 10 Firm odoba Big City Burrito Consuelo's Burrito all others (20 firms a. What is the approximate Herfindahl index? Instructions: Round your answer to the nearest whole number. b. Based on this Herfindahl index calculation, how would you describe its m Instructions: Round your answer to the nearest whole number sufficiently competitive" Type here to search

Explanation / Answer

The herfindahl index is the sum of the squares of the market shares of each firm in the industry.

a) herfindahl index = 102 + 52 + 32 + 22 + 42 * 20

herfindahl index = 458

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b) The herfindahl index is less than 1000 which indicates the industry is unconcentrated or a competitive market place.

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