A Student in a Managerial Economics Class Calculated the Four-Firm

question 12

Multiple Choice

A student in a managerial economics class calculated the four-firm concentration ratio and HHI for industries A andB.What is the proper conclusion she can draw from the following findings?

• A)Industry B is a monopoly.
• B)The market power of firms in industry A is greater than that in industry B.
• C)C4 is higher for Industry A while the HHI is higher for Industry B.This inconsistency must be due to a calculation error.
• D)Neither industry is perfectly competitive.

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