Sales (millions of dollars) OT Burgers Kwickie Chix Speedy Spuds Hasty Pudding O

Question

Sales (millions of dollars) OT Burgers Kwickie Chix Speedy Spuds Hasty Pudding Other 200 firms 81 The table above shows the revenue figures for the top four fims along with a total for the remaining firms in the fast-food industry. What is the four-firm concentration ratio for the industry? A) 200 B) 20 percent C) 25 percent D) 80 percent E) 100 percent 9) What is the four-frm concentration ratio if the four largest firms in an industry account for 5 percent, 6 percent, 7 percent and 8 percent of total revenue? A) 26 percent B) 174 percent C) 1,680 is enough information given to answer the question, but none of the answers above are correct E) There is not enough information given to answer the question. 10) What is the Herfndahl-Hirschman Index if the four firms in an industry account for 62 percent 15 percent 15 percent and 8 percent of total revenue? A) 100 B) 4,358 C) 111,600 D) 2,822 E) 6,200 Meriket sharve Firm Gary's Gourmet Allen's Extras Travis' Treats Orin's Eats Reed's Riches Seth's Sweetest Uriah's Foodfest 15 11) Suppose there are 7 fims in the candy industry with the market shares shown above. What is the HHI for the industry? A) 1850 B) 2000 C) 6400 D) 100 E) 20 12) Each of the ten firms in an industry has 10 percent of the industry's total revenue. The four-fim concentration ratio is A) 80 B) 100 C) 1,000 D) 40. 13) Each of the four firms in an industry has a market share of 25 percent. The Herfindahl-Hirschman Index equals A) 3,600. B) 100

Explanation / Answer

8) Four firm concentration ratio = (75 + 50 + 50 + 25)*100/(75 + 50 + 50 + 25 + 800) = 20%

9) Four firm concentration ratio = (5 + 6 + 7 + 8)*100/100 = 26 percent

10) HHI = (62%^2 + 15%^2 + 15%^2 + 8%^2)*10000 = 4358

11) HHI = (30%^2 + 25%^2 + 15%^2 + 10%^2 + 10%^2 + 5%^2 + 5%^2)*10000 = 2000

12) Four firm concentration ratio = 10% + 10% + 10% + 10% = 40%

13) HHI = (25%^2 + 25%^2 + 25%^2 + 25%^2)*10000 = 2500

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