The following table gives U.S. market share data in percentages for three paper

Question

The following table gives U.S. market share data in percentages for three paper product markets in
1994.


Facial Tissue Toilet Paper Paper Towels
Company % share Company % share Company % share
Kimberly-Clark 48 Procter & Gamble 30 Procter & Gamble 37
Procter & Gamble 30 Scott 20 Scott 18
Scott 7 James River 16 James River 12
Georgia Pacific 6 Georgia Pacific 12 Georgia Pacific 11
Other 9 Kimberly-Clark 5 Scott 4
Other 16 Other 18


a. Calculate the four-firm concentration ratio for each industry.
b. Calculate each industry's HHI Index.
c. Which industry do you think exhibits the most concentration?


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Explanation / Answer

a.4:5.25 using equity addition method b.4.21 using the gain formula c.toilet paper due to high sales

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