Suppose an industry that has 10 firms. Below are the market shares for 2008 and 2013 of the 10 firms.

Market Share

Firms

2008

2013

A

B

C

D

E

F

G

H

I

G

26%

21%

16%

10%

9%

7%

4%

3%

2%

2%

22%

23%

19%

9%

8%

7%

6%

4%

1%

1%

1.Calculate the concentration ratio CR4 and the concentration ratio CR8 for 2008 and 2013

(5 points)

2.Calculate the Herfindahl-Hirschmann Index (HHI) for 2008 and 2013 (5 points)

3.Using the CR4, CR8, and HHI, analyze the evolution of the seller concentration in the industry. Has the industry become more or less concentrated? (10 points)

4.Using the CR4, CR8, and HHI, analyze the evolution of the potential market power of firms in the industry. (10 points)