Assignment
Read the entry on ‘industrial concentration' in the Concise Encyclopedia of Economics at https://www.econlib.org/library/Enc/IndustrialConcentration.html.
This will introduce concepts related to measuring the concentration of firms within an industry (as it relates to our discussions of market structure).
For this assignment, each person has been assigned a manufacturing industry as defined by a 5-digit North American Industrial Classification System (NAICS) code (See below for assignments.
Note that several people have been assigned to each industry. You are welcome and encouraged to work together on this assignment.
I have included email addresses in the list to facilitate this. If you do work as a group, you can turn in a single assignment.) More information about the NAICS code definitions can be found by looking up the code at https://www.naics.com/search/. I would also suggest looking up the Industry Snapshot for your industry at https://www.census.gov/econ/snapshots/index.php.
Assignment:
(1) You are to find at least one article from the business press about a company that produces in the assigned industry. I would suggest using the Library's Business Source Complete database. You should try to find an article (or articles) that discusses aspects of the market or market conditions that the firm faces. If possible, also find a SWOT (strengths, weaknesses, opportunities and threats) analysis for your chosen firm.
(2) Next collect and present data on the 4-, 8-, 20- and 50-firm concentration ratios and the Herfindahl-Hirschman Index from the 2012, 2007, 2002 and 1997 Economic Census. The 1997, 2002 and 2007 data can be found at https://www.census.gov/econ/concentration.html(all of the assigned industries are ‘manufacturing' (NAISC codes beginning with 31-33), so follow the links in the 4th row of the table). The 2012 data can be found at the Census Industry Statistics Portal https://www.census.gov/econ/isp/index.php[Note that for some industries' data may be withheld for confidentiality reasons. In that case a D will appear in the data table].To make things easier, I have put direct links to the exact data tables you need in the Assignment 2 page on the class D2L shell.
(3) Finally, given the evidence collected, decide whether the market is best described as perfectly competitive, monopolistically competitive, an oligopoly, or a monopoly. Provide details as to why you made the choice you made (using evidence from the articles and well as the concentration data) to support your decision.
Format of submission:
Your answers should be in the form of an Analytical Report submitted to a decision maker/executive at your organization. It should include (1) an Executive Summary of no more than 200 words, (2) a brief description/definition of the industry under analysis, (3) a section reporting the concentration ratios and HHI data including brief definitions of terms as needed, (4) a description of relevant market factors and forces (as found through your research), and (5) a conclusion indicating which market structure best describes this industry (with evidence-based explanation as to why you have drawn this conclusion). Any articles used in preparing your report should be included as reference.