133) Consider two industries, industry W and industry X. In industry W there are five companies, each with amarket share of 20% of total sales. In industry X, there are six companies. One company has a 50% market shareand each of the other five firms has a market share of 10%.a.Calculate the four-firm concentration ratio for each industry.b.Calculate the Herfindahl-Hirschman Index (HHI) for each industry.c.What do the values of the two concentration measures imply about the degree of market power in thetwo industries?
Diff: 3Page Ref: 506/506Topic: Characteristics of MonopolyLearning Outcome: Micro 14: Discuss production and pricing decisions within monopolies and how public policies affectmonopoliesAACSB: Analytic Skills43