There are five firms in an industry. You know sales of the four largest firms are $1,000,000, $500,000, $400,000, and $178,000. If the C4 ratio is 95 percent, then the HHI is:
A. 3,038.
B. 2,755.
C. 5,017.
D. 1,810.
Answer: A
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The government is running a budget deficit if:
A. government spending is greater than tax revenue. B. tax revenue is greater than government spending. C. tax revenue is greater than consumption spending. D. tax revenue is greater than investment spending.
Exchange rate overshooting suggests that an unexpected increase in the domestic money supply by 10 percent will cause the short-run exchange rate value of the domestic currency to
A. appreciate by less than 10 percent. B. depreciate by more than 10 percent. C. depreciate by less than 10 percent. D. appreciate by more than 10 percent.
Which of the following statements is FALSE?
A) A good with a vertical demand curve has a perfectly inelastic demand. B) A good with a straight line, downward sloping demand curve has a demand whose elasticity is constant. C) A good with a horizontal demand curve has a perfectly elastic demand. D) All of the above statements are false.
Under a fixed exchange rate regime, if a country's central bank runs out of international reserves, it cannot keep its currency from
A) depreciating. B) appreciating. C) deflating. D) inflating.