Suppose There Are 11 Automakers

question 39

Multiple Choice

Suppose there are 11 automakers. The top three have 20% of the market each, and the remaining eight six divide remaining market share evenly. The HHI is

• A)0.
• B)909.
• C)1,400.
• D)10,000

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Definitions:

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, often used to gauge the valuation of a company's shares.

Profitability

The degree to which a business or activity yields profit or financial gain, typically assessed through ratios such as net profit margin.

Investment by Common Stockholders

The total capital contribution from shareholders who own common stock in a company.

Ratio

A quantitative relation between two amounts showing the number of times one value contains or is contained within the other.