View the step-by-step solution to: Suppose that a small town has seven burger shops whose respective

Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percentages of all hamburgers sold): 25%, 24%, 20%, 12%, 9%, 6%, and 4%.

What is the four-firm concentration ratio of the hamburger industry in this town? %

What is the Herfindahl index for the hamburger 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?

The four-firm concentration ratio would be %.

The Herfindahl index would be .

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