Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percent- ages of all hamburgers sold):23 percent, 22 percent, 18 percent, 12 percent, 11 percent, 8 percent, and 6 percent.
What is the four-firm concentration ratio of the hamburger industry in this town?
What is the Herfindahl index for the hamburger industry in this town?
If the top three sellers combined to form a single firm, what would happen to the four-firm concentration ratio and to the Herfindahl index?

Question

Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percent- ages of all hamburgers sold):23 percent, 22 percent, 18 percent, 12 percent, 11 percent, 8 percent, and 6 percent.
What is the four-firm concentration ratio of the hamburger industry in this town?
What is the Herfindahl index for the hamburger industry in this town?
If the top three sellers combined to form a single firm, what would happen to the four-firm concentration ratio and to the Herfindahl index?

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