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ECON-3404-02_19SP: Managerial Economics Assignment: Oligopoly and Firm Architecture Chapter 10: Oligopoly and Firm Architecture- 10:1, 2; p. 459 & 10:2, 5; pp. 468-69.

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ECON-3404-02_19SP: Managerial Economics Assignment: Oligopoly and Firm Architecture Chapter 10: Oligopoly and Firm Architecture- 10:1, 2; p. 459 & 10:2, 5; pp. 468-69. 1. Find the Herfindahl index ... for an industry composed of (a) three firms—one with 70 percent of the market, and the other two with 20 and 10 percent of the market, respectively; (b) one firm with a 50 percent share of the market and 10 other equalsized firms; (c) 10 equal-sized firms. a.) Given that the three firms have a market share of 70%, 20%, and 10%, the Herfindahl index is H = 70^2 + 20^2 + 10^2 = 4,900 + 400 + 100 = 5,400 Or Herfindahl index= .7^2 + .2^2 + .1^2 =0.54 b.) Given that one of the firm's has a market share of about 50% and three are 10 equal sized firms, the Herfindahl index will come out to be H= 50^2 + 10(5^2) =2,500 + 10(25) =2,500 + 250 = 2,750 Or Herfindahl index = .5^2 + (.05^2)*10 = 0.275 c.) Given that there are 10 equal sized firms, the Herfindahl Index will come out to be H= 10(10^2) = 10(100) =1,000 Or Herfindahl index = (.1^2)*10= 0.1 [Show More]

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