Question
There are 23 companies in the market; 3 large companies share 48% of the market equally between them, 8 medium companies equally share 48% of
There are 23 companies in the market; 3 large companies share 48% of the market equally between them, 8 medium companies equally share 48% of the market, and 12 small companies share the rest of the market. The government increases the license price each company in the market should pay annually. This leads to a merger of 6 medium and all small companies into one large company with a market share of 40%. The market shares of the rest of the companies remain at their initial level.
Calculate the difference in the four-firm concentration ratio before and after the license price was increased. Write the exact answer. Do not round.
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