When describing the Herfindahl-Hirschman Index (HHI) in class, one slide suggested, “Weight each firm by its own market share: Then bigger firms get bigger weights.” Briefly explain why that weighting approach is important for a more useful measure of market structure. Please do fast ASAP fast
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- .A measure called Herfindahl-Hirschman Index is used to measure the degree of competition in an industry. The HHI is the square of each firm’s market share summed over the firms in the industry. (Where a market share is the percentage of sales in the market accounted for by that firm). For example, if an industry contains only three firms and their market shares are 60%, 25%, and 15% then the HHI (by squaring each firm’s share and summing them) is 4450. Some economists classify the market structures according to HHI scores. An HHI below 1,500 indicates a strongly competitive market, between 1,500 and 2,500 indicates a somewhat competitive market, and over 2,500 indicates an oligopoly. Given the information in the table, calculate the HHI in this industry. If yahoo and Bing were to merge, what would the HHI be? Google 67% Yahoo 18 Bing 11 Ask 3 AOL 1can you show the answers through a graph with two heterogeneous firms.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
- B.A measure called Herfindahl-Hirschman Index is used to measure the degree of competition in an industry. The HHI is the square of each firm's market share summed over the firms in the industry. (Where market share is the percentage of sales in the market accounted for by that firm). For example, if an industry contains only three firms and their market shares are 60%, 25%, and 15% then the HHI (by squaring each firm's share and summing them) is 4450. Some economists classify the market structures according to HHI scores. An HHI below 1,500 indicates astrongly competitive market, between 1,500 and 2,500 indicates a somewhat competitivemarket, and over 2,500 indicates an oligopoly. Given the information in the table, calculate the HHI in this industry. If yahoo and Bing were to merge, what would the HHI be? Search engine Market share Google 67% Bing 18 Yahoo! 11 Activate Windo Go to Settings to act Ask 3 AOL 1Briefly discuss the forces that have increased the level of competition faced by firms in the modern-day U.S. economy and elsewhere.Use the following table to calculate the Herfindal-Hirshman Index for the U.S. auto market. Would the FTC approve a merger between Gm and Ford? Explain your response. The table is......... GM 19% Ford 17% Toyota 14% Chrysler 11%
- V11 Read the article Internationally Acclaimed Quilter Claims Fraud in Lawsuit Seeking Share of Quilts’ Profits. According to the article, “[t]he lawsuit says any agreement between the quilters and the defendants was oral and was not put into writing.” After studying the statute of frauds in this unit, why is the failure to put the agreement into writing problematic? Be specific in your answer, citing any of the statutes of frauds that you think may apply to the lawsuit. "New AnswerSuppose an industry consists of three firms. Two firms have sales of $10 each, and one firm has salesof $30. What is the Herfindahl-Hirschman index for this industry?Will the firms in an oligopoly act more like a competitors or more like competitors? Briefly explain.
- K DOJ and FTC use the Hertindahl-Hirschman Index as a measure of concentration. How is this calculated? By O A. adding up the market shares of all firms in the industry, squaring this number and then dividing by the number of firms in the industry. OB. determining the market shares of the four largest firms in the industry, but unlike the concentration ratio, the Index includes sales in the United States by foreig OC. squaring the four - firm concentration ratio of the industry and dividing this number by the total number of firms in the industry. D. squaring the market shares of each firm in an industry and then adding up the values of the squares.Let's assume that the table below represents the market shares for the smart phone market. Firm Market Share Apple 44% Fujitsu 3% Kyocera 2% LG 3% Motorola 13% Samsung 24% Sanyo 4% Siemens 2% Sony Ericsson 5% Based on this information, the four-firm concentration ratio isSuppose 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