What is the Herfindahl Index? The Pizza market is made up of 55 separate firms. The market share for the top 5 firms is shown in the table below plus the market share of the remaining 50 firms in this market. Pizza Hut Domino's Firm Little Caesars Pizza Inn/Pantera's Round Table all others (50 firms) Market Share 20.7% 17.0 6.7 2.2 2.0 51.4 a. How would you describe its market structure? Oligopoly ▼ b. What is the approximate Herfindahl index? Instructions: Round your answer to the nearest whole number.

What is the Herfindahl Index? The Pizza market is made up of 55 separate firms. The market share for the top 5 firms is shown in the table below plus the market share of the remaining 50 firms in this market. Pizza Hut Domino's Firm Little Caesars Pizza Inn/Pantera's Round Table all others (50 firms) Market Share 20.7% 17.0 6.7 2.2 2.0 51.4 a. How would you describe its market structure? Oligopoly ▼ b. What is the approximate Herfindahl index? Instructions: Round your answer to the nearest whole number.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter9: The Financial Markets And The Economy: The Tail That Wags The Dog

Section: Chapter Questions

Problem 4DQ

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Unsure which is the correct answers Suppose that three firms make up the entire wig manufacturing industry. One has a 50% market share, and the other two have a 25% market share each. The Herfindahl index of this industry is a. 3,750 b. 1,000 c. 10,000 d. 5,000 e. 2,500 Mane Attraction, one of the firms with a 25% market share in the wig manufacturing industry, leaves the market. This would cause the Herfindahl index for the industry to __-- a. remain the same b. fall c. rise The largest possible value of the Herfindahl index is 10,000 because: a. an index of 10,000 corresponds to 100 firms with a 1% market share each b. an index of 10,000 corresponds to a monopoly firm with 100% market share c. an industry with an index higher than 10,000 is automatically regulated by the Justice Department
Consider the following table describing the pharmaceutical market structure and computethe Herfindahl index.
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Suppose that three firms make up the entire wig manufacturing industry. One has a 50% market share, and the other two have a 25% market share each. The Herfindahl index of this industry is _____. a. 3,750 b. 1,000 c. 10,000 d. 5,000 e. 2,500 Mane Attraction, one of the firms with a 25% market share in the wig manufacturing industry, leaves the market. This would cause the Herfindahl index for the industry to _____. a. remain the same b. fall c. rise The largest possible value of the Herfindahl index is 10,000 because: a. an index of 10,000 corresponds to 100 firms with a 1% market share each b. an index of 10,000 corresponds to a monopoly firm with 100% market share c. an industry with an index higher than 10,000 is automatically regulated by the Justice Department
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Use the information in the table below. Percentage of Sales Firm 1 Firm 2 Firm 3 Firm 4 Which of the industries is the most concentrated based on the Herfindahl Index? Industry type your answer... What is this industry's Herfindahl Index? type your answer... Industry 1 Industry 2 Industry 3 Industry 4 55% 45% 25% 10% 35% 40% 25% 20% 35% 10%- 10% 60% 10% 20%
Assume the top four firms comprising an industry have market shares of 25, 20, 15, and 10 percent. The remaining 30 firms each have market shares of 1 percent. The Herfindahl index for this industry is 100. 253. 876. 1380.
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