Why there be temptation to cheat on collusive agreement


Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percentages of all hamburgers sold): 23%, 22%, 18%, 12%, 11%, 8%, and 6%. What is the four- firm concentration ratio of the hamburger industry in this town? What is the Herfindahl index for thehamburger 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? Why might there be a temptation to cheat on the collusive agreement?

 

Request for Solution File

Ask an Expert for Answer!!
Microeconomics: Why there be temptation to cheat on collusive agreement
Reference No:- TGS0521614

Expected delivery within 24 Hours