Depending on the type of industry, a firm may face a high degree of competition or very little or even no competition.

As you may have read from Chapter 10 of the textbook, the two highly popular measures of competition in an industry are the Four-Firm Concentration Ratio and the Herfindahl-Hirshman index.

1. Use the following data on the sales of the firms in the tattoo industry to calculate the four-firm concentration ratio for the industry and use the ratio to describe the structure of the tattoo industry (i.e., perfect competition, monopoly, monopolistic competition or oligopoly).

Firm	Sales (dollars per year)
Bright spots	450
Freckles	325
Love Galore	250
Native Birds	200
Other 15 much smaller firms each of which has sales less than 200 dollars per year	800

1. Now use the following data on the market shares of the firms in the chocolate industry to calculate the Herfindahl-Hirshman index for the industry and use the index to describe the structure of the chocolate industry (i.e., perfect competition, monopoly, monopolistic competition or oligopoly).

Firm	Market share (percent)
Truffles, Inc.	25
Magic, Inc	20
Mayfair, Inc	15
All Natural, Inc.	15
Gold, Inc.	15
Bond, Inc.	10