1. There are six firms in an industry. The quantities that they produce are given in the table below. Fill in their market shares. Then calculate the four-firm concentration index and the Hirschman-Herfindahl Index.

Firm	Quantity	Market Share
Spades	50
Hearts	35
Diamonds	60
Clubs	18
Halberds	25
Brains	12
Four-Firm Concentration Ratio		Hirschman-Herfindahl Index

2. Is the industry from question #1 of concern for public policy makers? If so, what problem might exist? What remedies would you suggest to correct that problem or those problems?

3. In the following table, the profits are shown for Saudi Arabia and Nigeria for producing oil. Saudi Arabias profits are listed first and Nigerias are listed second in each cell. For simplicity, each county can only chose to produce a low quantity or a higher quantity. How much oil should each country produce? Why?

Profits from Oil Production		Nigeria
		Low Quantity	High Quantity
Saudi Arabia	Low Quantity	$100M, $10M	$75M, $15M
	High Quantity	$80M, $7M	$60M, $10M

4. There are two firms in an industry. The leader firm decides its output quantity first and the more agile follower firm decides its output quantity knowing what the leader firm has committed to produce. Given the following table, make a table showing the profits for each firm for all their possible choices.

Total Quantity	Price	Cost/unit	Industry Profit
1	$100	$40	$60
2	$80	$40	$80
3	$60	$40	$60
4	$40	$40	$0
5	$20	$40	-$100
6	$0	$40	-$240