The attached table represents the market share of the top eight firms in a hypothetical industry in 2006 and 2011.
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- Calculate the four-firm concentration ratios for 2006 and 2011. Analyze the industry changes during this five-year period.
- Calculate the eight-firm concentration ratios for 2006 and 2011. Does this index give you any different indication about changes in the industry over the same period?
- Calculate the Herfindahl-Hirschman Indexes for 2006 and 2011. What information does this index tell you about changes in the industry? How does this information differ from the four-firm and eight-firm indexes?
- Hypothesize what you think might have happened to supply, demand, and price of products in this industry from 2006 to 2011. Use charts, if appropriate, to illustrate your response.
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