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(a) For each of the following calculate the four-firm concentration ratio and the Herfindahl index.
Industry 1: 44 firms in the industry. The four largest firms each have a 15% market share, the remaining firms each have a 1% market share.
Industry 2: 7 firms in the industry. The six largest firms each have a 15% market share, the remaining firm has a 10% market share.
(b) Is it possible to state with certainty which industry is more competitive? Explain your answer by using your calculations from (a) in your explanation.
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