Problem
Your job is to calculate concentration ratios for different industries. Based on this information, answer the following three questions. Where necessary, ensure that you show FULL calculations, and keep your answers to 2 decimal points.
i. What is the difference between the Herfindahl Hirschman Index (the HHI) and the n-firm Concentration Ratio?
ii. Suppose that there are a total of 6 firms in an industry. You find out that the sales are as follows: Firm 1 has annual sales of $2000; Firm 2 has annual sales of $1800; Firm 3 has annual sales of $1500; Firm 4 has annual sales of $700; Firm 5 has annual sales of $600 and Firm 6 has annual sales of $250. Calculate the HHI for this industry.
iii. Now suppose that in a different industry, which is called Industry JKL, and which has 5 firms, you find that the sales of four of the firms are $650,000, $250,000, $150,000, and $145,000. If the C4 ratio is 95 percent, then what is the HHI?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.