Consider Two Industries, Industry W and Industry X

question 171

Essay

Consider two industries, industry W and industry X.In industry W there are five companies, each with a market share of 20% of total sales.In industry X, there are six companies.One company has a 50% market share and each of the other five firms has a market share of 10%.
a.Calculate the four-firm concentration ratio for each industry.
b.Calculate the Herfindahl-Hirschman Index (HHI)for each industry.
c.What do the values of the two concentration measures imply about the degree of market power in the two industries?

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Definitions:

Culturally Diverse Environments

Settings where individuals or groups from different cultural, ethnic, or national backgrounds interact and work together.

Loose Cultures

Cultures that have less strict norms and rules and allow for a wider variety of behavior and beliefs among their members.

Standards For Behaviour

Standards for behaviour refer to the established norms or criteria that guide individuals' actions in various social or professional contexts.

Tight Cultures

Societies or organizations that have strict norms and little tolerance for deviant behaviors.