Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percentages of all hamburgers sold): 25%, 24%, 20%, 12%, 9%, 6%, and 4%.
What is the four-firm concentration ratio of the hamburger industry in this town? %
What is the Herfindahl index for the hamburger industry in this town?
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.