Suppose the Herfindahl indexes for industries A, B, and C are
2,200, 2,000, and 1,600, respectively. These data imply
Multiple Choice
that market power is greatest in industry C.
nothing about the degree of concentration across the three
industries.
that market power is greatest in industry A.
that market power is greatest in industry B.
Industries X and Y both have four-firm concentration ratios of
60 percent, but the Herfindahl index for X is 3,369, while that for
Y is 2,412. These data suggest
Multiple Choice
that price competition is stronger in X than in Y.
greater market power in X than in Y.
that X is more technologically progressive than Y.
greater market power in Y than in X.