Exercise 2
Let consider a market composed by firms N = {1,2,3}, with market shares $s_1 = 0.45$, $s_2 =$
0.25, $s_3 = 0.15$, $s_4 = 0.1$, $s_5 = 0.5$, respectively. Compute the simple concentration ratios
($C_3$) and Hirschman - Herfindahl concentration index ($HHI_3$). If firm 2 loses some market
share in favor of the firm 3, what happens to $C_3$ and what to $HHI_3$ (you can also answer
without any computation)?