Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percentages of all hamburgers sold): 27%, 26%, 23%, 11%, 7%, 4%, and 2%.
Instructions: Enter your answers as whole numbers.
a. What is the four-firm concentration ratio of the hamburger industry in this town? %.
b. What is the Herfindahl index for the hamburger industry in this town? .
c. If the top three sellers combined to form a single firm, what would happen to the four-firm concentration ratio and to the Herfindahl index?
The four-firm concentration ratio would be %.
The Herfindahl index would be .