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(Solved): Suppose that a company based in Dallas, Texas, initially confronts only four other rival firms. Its ...




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Suppose that a company based in Dallas, Texas, initially confronts only four other rival firms. Its own market share is 31 percent, which ties it with the other largest producer and seller in the industry. The market share of each of the other three firms is 12.67 percent. Then a sixth firm, located in Cleveland, Ohio, enters the same industry. The new firm captures 6.33percent market share, and the market share of one of the smallest three original incumbents declines to 6.33 percent as well. After the Cleveland firm's entry into the industry, what are the values of the four-firm concentration ratio and of the Herfindahl-Hirschman index? After the Cleveland firm's entry into the industry, the four-firm concentration ratio for this industry is A. 87.3 percent. B. 62.7 percent. C. 74.7 percent. D. 81.0 percent.


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After the entry of the Cleveland firm into the industry, the market shares of the original firms and...
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