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Suppose that a small town has six burger shops whose respective shares of the local market...

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Economics

Suppose that a small town has six burger shops whose respectiveshares of the local market are (as percentages of all hamburgerssold): 26%, 20%, 18%, 14%, 12%, 10%,

a) What is the four-firm concentration ratio ofthe hamburger industry and what is the Hirchmann HerfindahlIndex (HHI) for the hamburger industry in thistown?                                                                      

b) Assume that the largest producer now purchases the thirdlargest firm (based market share) so that this new combined firmhas the same market share as old firm 1 and old firm 3 combined.Compute the new four-firm concentration ratio andto the new HHI?

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