What is the meaning of a four-firm concentration ratio

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What is the meaning of a four-firm concentration ratio of 30 percent? 85 percent? Suppose five firms in industry A have annual sales of 30, 30, 20, 10, and 10 percent of total industry sales. For the five firms in industry B, the figures are 60, 25, 5, 5, and 5 percent. Calculate the Herfindahl index for each industry. If industry B were at&t (60%) and T-Moble (25%) would the Justice Department allow the two firms to merge? Why or why not? If at&t had 20% of the market and T-Moble had 2% would the answer be the same? Why? What was the final outcome?

Reference no: EM131112677

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