Suppose That There Are Two Industries, a and B

question 50

Multiple Choice

Suppose that there are two industries, A and B.There are five firms in industry A with sales at $5 million, $2 million, $1 million, $1 million, and $1 million, respectively.There are 4-firms in industry B with equal sales of $2.5 million for each firm.The HHI for industry B is:

• A)2,500.
• B)1,800.
• C)3,200.
• D)2,800.

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Definitions:

Spare Parts Store

A business or location that specializes in selling replacement parts and components for machinery, vehicles, or other equipment.

Underapplied Overhead

Refers to the situation when the actual factory overhead costs are more than the overhead costs applied to a product based on the predetermined rate.

Overapplied Overhead

A situation where the estimated manufacturing overhead cost is more than the actual overhead incurred during a period.

Value Chain

A model that describes the full range of activities needed to create a product or service, from initial conception through the various phases of production to the final customer.