Business: Firm Market Share (%) A 20 B 20 C 20 D 20 E 10 F 10 Suppose that firms A and F in this table merged into a single firm. The four-firm concentration ratio and the Herfindahl index would be:. a. Both rise b. Rise and remain unchanged, respectively. c. Both fall. d. Remain unchanged and rise, respectively.

Firm Market Share (%) A 20 B 20 C 20 D 20 E 10 F 10 - id202020201016985691, Isabelcastillox9096

hayyeet

29.01.2022

Both rise

Explanation:

The Herfindahl index is calculated by squaring the market share of firms and then adding it.

The four firm concentration ratio = 0.2^2 × 4 = 0.16

If A and F merges, their market share becomes 20%+10%=30%

The four firm Herfindahl index = 0.3^2 +( 0.2^2 × 3) = 0.12 + 0.09 = 0.21

The concentration ratio before the merger = 20% x 4 = 80%

After the merger it becomes (30 + 20 + 20 + 20) = 90%

From the calculations, they both increase

I hope my answer helps you

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happyabbie23

21.11.2021

i dont talk to people on here sorry miracle

Explanation:

thx for the points

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