note1-ch10 - Econ 251 Fall 2009 Handout 16 10/20/09 Chapter...

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Handout 16 10/20/09 1 Chapter 10 – Perfect Competition Markets and the competitive environment Economists identify four types of industries: Measures of Industry Concentration: 1. Four-Firm Concentration Ratio (CR) : _________________________________ accounted for by the four largest firms in an industry. The ______________ the CR the __________________________ the industry is. Examples : Table 1. Percentage of sales by firm, Industry 1 F1 F2 F3 F4 F5 F6 F7 F8 20% 20% 20% 20% 5% 5% 5% 5% The largest four firms account for _______________________________ CR= Table 2. Percentage of sales by firm, Industry 2 F1 F2 F3 F4 F5 F6 F7 F8 30% 30% 10% 10% 5% 5% 5% 5% The largest four firms account for _____________________________ CR= 2. Herfindahl-Hirschman Index (HHI): __________________________________ of each firm summed over all firms in a market (or the largest 50 firms). The greater the HHI the ____________________________ the industry is.
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note1-ch10 - Econ 251 Fall 2009 Handout 16 10/20/09 Chapter...

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