Report and interpret the 4 firm concentration ratio, the 8 firm concentration ra
ID: 1251167 • Letter: R
Question
Report and interpret the 4 firm concentration ratio, the 8 firm concentration ratio and the Herfindahl Herschler Index for the industry The industries involved in the merger are: new Scale Inc., Intel Technologies, Pari Networks, they were merged into cisco. This industry is the technology industry in video streaming. I also need an explanation on the concentration ratios and the HHI I need this answer by this evening or early tomorrow morning. Please explain to me how to use the CR4, CR8 and the HHIExplanation / Answer
CR 4 and CR 8 refer to the sum of the market share of the 4 largest and 8 largest firms in an industry respectively. For example, if the 4 largest firms in the sugar industry have 15%, 10%, 10% and 5% respectively, the CR 4 would be 15 + 10 + 10 + 5 = 40%. With CR 8 you would do it with the 8 largest firms. HHI is a measure where you take the market share of each participant and square it and then add all those numbers up. Lets say 3 firms have 60%, 30% and 10% in the cotton industry. The HHI would be 60^2 + 30^2 + 10^2 = 4,600 Typically, for CR 4 and CR 8 the ranges between 0 - 50% are considered more competitive while 100% would be a perfect monopoly. for HHI, anything above 2200 is considered monopolistic. If you submit a question with the market shares of the industries you are looking at, I can walk you through how to think about them. Hope this helps!